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COMPANY X, A CANADIAN MANUFACTURER OF CHAIRS, IS CURRENTLY EXPORTING $100,000 WORTH OF CHAIRS TO THE UNITED STATES. THE FIRM IS CONSIDERING OPENING A PRODUCTION
COMPANY X, A CANADIAN MANUFACTURER OF CHAIRS, IS CURRENTLY EXPORTING $100,000 WORTH OF CHAIRS TO THE UNITED STATES. THE FIRM IS CONSIDERING OPENING A PRODUCTION FACILITY IN THE UNITED STATES THAT WOULD PRODUCE ENOUGH CHAIRS FOR THE ENTIRE US MARKET AND IS PREDICTING TOTAL SALES IN THE UNITED STATES TO BE $500,000. WHEN ANALYZING THE PROJECT, COMPANY X SHOULD:
Select one:
a. IGNORE EXPORTS OF $100,000 SINCE THEY ARE NOT AN INCREMENTAL CASH FLOW FROM THE PROJECT
b. IGNORE THE EXPORTS OF $100,000 SINCE THEY ARE NOT PART OF THE PROJECT
c. INCLUDE $100,000 AS LOST EXPORT SALES IN THE CAPITAL BUDGET
d. NONE OF THESE CHOICES
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