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The project will require an initial investment of $20,000, but the project will also be using a company-owned truck that is not currently being used. This truck could be sold for $12,000, after taxes, if the project is rejected. What should Celestial Crane Cosmetics do to take this information into account?
a. The company does not need to do anything with the value of the truck because the truck is a sunk cost
b. Increase the NPY of the project by $12,000,
c. Increase the amount of the initial investment by $12,000.

Respuesta :

tanseershar

Answer:

c. increase the amount of the initial investment by $12,000

Explanation:

The relevant cost of truck is $12,000 for the project because if it not used in the project, it will fetch a revenue of $12,000 after taxes from the market.

Therefore the initial investment  of the project will increase by $12,000

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