Opportunity cost. Richardses' Tree Farm, Inc. has branched into gardening over the years and is now considering adding patio furniture to its product lineup. Currently, the area where the patio furniture is to be displayed is a vacant slab of concrete attached to the indoor shop. The company originally paid $8,000 to put in the slab of concrete three years ago. It would now cost $12,000 to put in the same slab of concrete. Should the company consider the concrete slab when expanding its outdoor garden shop to include patio furniture? If yes, which value should it use?

Should the company consider the concrete slab when expanding its outdoor garden shop to include patio furniture? If yes, which value should it use?

(Select the best response.)

A.No. The slab is a sunk cost unless there is another use for the slab that could provide cash flow to Richardses' Tree Farm. The additional cash flow that the slab could provide is the opportunity cost, not the current replacement cost or the original cost.

B.Yes, use $12,000 as the cost.

C.Yes, use $8,000 as the cost.

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Working capital cash flow.

Cool Water, Inc. sells bottled water. The firm keeps in inventory plastic bottles at 10% of the monthly projected sales. These plastic bottles cost $0.004 each. The monthly sales for the first four months of the coming year are as follows:

January:1,900,000
February:2,200,000
March:2,700,000
April:3,100,000

What is the monthly increase or decrease in cash flow for inventory given that an increase is a use of cash and a decrease is a source of cash?Note:Enter a decrease as a negative number.

What is the change in working capital for January?

$nothing

(Round to the nearest dollar.)