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Kathy Smith has developed a new line of computer monitors that she is planning to manufacture. Before doing so she is undertaking a capital budgeting

Kathy Smith has developed a new line of computer monitors that she is planning to manufacture. Before doing so she is undertaking a capital budgeting analysis. It is expected that the new monitor will see a reduction of sales of the older model. How should this be treated in a capital budgeting analysis? Explain your answer.

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