For the past five years, the McArthur Company has produced and sold frequency meters to genetics labs throughout the United States. Recently, a strong competitor has entered the market and McArthur is considering whether it should continue to produce and sell the frequency meters. The following information has been gathered to assist management in its decision:

1. A) Sales volume (units) is estimated to drop by 25% once the competitor becomes fully operational.

2. B) The equipment used to produce the meters was purchased five-years ago for $1,500,000.

3. C) The space now used to produce the meters would be reallocated to eliminate the need to rent warehouse space.

4. D) The share of the CEOs salary allocated to the frequency meters would be reassigned to the oscillator division.

Which of the items listed above is (are) relevant to the decision to continue the production and sale of the frequency meters?

Multiple Choice

• B and C.

• A and C.

• C and D.

• A, B, and D.