(Consideration of sunk and opportunity costs) Hewlett-Packard has designed a new type of printer that produces professional quality photos. These new printers took 2 years to develop, with research and development running at $10 million after taxes over that period. Now all that's left is an investment of $22 million after taxes in new production equipment. It is expected that this new product line will bring in free cash flows of $5 million per year for each of the next 10 years. In addition, if Hewlett-Packard goes ahead with the new line of printers, the current production facility for the old printers that are to be replaced with this new line could be sold to a competitor, generating $3 million after taxes. a. How should the $10 million of research and development be treated? b. How should the $3 million from the sale of the existing production facility for the old printers be treated? c. Given the information above, what are the cash flows associated with the new printers? a. How should the $10 million of research and development be treated? (Select the best choice below.) O A. It should be excluded from the project's net cash flows as operating expenses. OB. It should be excluded from the project's net cash flows as sunk costs O C. It should be included in the project's net cash flows as opportunity-cost cash flows. OD. It should be included in the project's net cash flows as sales revenues. b. How should the $3 million from the sale of the existing production facility for the old printers be treated? (Select the best choice below.) O A. They should be excluded from the project's net cash flows as operating expenses. OB. They should be excluded from the project's net cash flows as sunk costs. O C. They should be included in the project's net cash flows as opportunity-cost cash flows. OD. They should be included in the project's net cash flows as sales revenues. c. Given the information above, what are the cash flows associated with the new printers? (Select the best choice below.) O A. There are initial cash outlays of $22 million - $10 million = $12 million and cash inflows of $5 million per year for 10 years. O B. There are initial cash outlays of $22 million and cash inflows of $5 million per year for 10 years. O C. There are initial cash outlays of $22 million - $3 million = $19 million and cash inflows of $5 million per year for 10 years O D. There are initial cash outlays of $22 million - $10 million - $3 million = $9 million and cash inflows of $5 million per year for 10 years