Question
Sparkling Clean makes household products. The firm is considering production of a new disinfecting cleaner. In evaluating whether to go ahead with the project, which
Sparkling Clean makes household products. The firm is considering production of a new disinfecting cleaner. In evaluating whether to go ahead with the project, which item should NOT be explicitly considered when cash flows are estimated? a. The project will utilize some equipment the company currently owns but is not now using. A used-equipment dealer has offered to buy the equipment. b. The new disinfectant cleaner will cut into sales of the firms other cleaners. c. The company spent $2 million on market research related to the disinfectant cleaner. These funds cannot be recovered, but the research is expected to benefit other projects that might be proposed in the future. d. The production of the disinfectant cleaner would be in a vacant building owned by Sparkling Clean. The building was used to produce another product until last year. Sparkling Clean could lease the building to ABC Inc.
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