g2 sunk costs and opportunity costs davul Industries is developing the relevant cash flows associated with the proposed replacement of an existing machine tool with a new, tech- nologically advanced one. Given the following costs related to the proposed project, ex- pain whether each would be treated as a smk cost or an opportunity cost in developing the relevant cash flows associatied with the proposed replacement decision a. Covol would be able to use the same tooling, which had a book value of P1 1-5 $40,000, on the new machine tool as it had uwed on the old one