FIN-450 - Chapter 11 Practice Problems.xlsx - Sunk costs...

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a. How should the $1,000,000 in development costs be classified? Sunk costs and opportunity costs Masters Golf Products, Inc., spent 3 years and $1,000,000 to develop its new line of club heads to replace a line that is becoming obso To begin manufacturing them, the company will have to invest $1,800,000 in new equipment. The new clubs are expected to generate an increase in operating ca inflows of $750,000 per year for the next 10 years. The company has determined th the existing line could be sold to a competitor for $250,000.
b. How should the $250,000 sale price for the existing line be classified?
10 $750,000 $5,950,000
olete. ash hat
a. What is the book value of the machine?

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