ACCT - ATC 5-5 - Alex Fish ACCT-042 ACT 5-5 a. $110,000 -...

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Alex Fish ACCT-042 ACT 5-5 a. $110,000 - $75,000 = (35,000) b. The cost of the original purchase is a onetime facility-level cost. The difference between the market price and the price paid is a sunk cost; it has already occurred and the money has been lost. The market value price is relevant because the $35,000 difference is already lost, and has no bearing on any future investments or land purchases. c. This decision is using quantitative analysis because it is analyzing what the mathematical outcomes of each decision will be. Using quantitative analysis, we determine that the new site will cost an additional $10,000. We also know that we will get virtually twice the traffic. Quantitative analysis would suggest we buy the new site because we get double the traffic for much less than double the price. d. The situation does not seem to violate any terms of the Statement of Ethical Professional Practice upon first glance. Technically, Mr. Dillsworth is violating the integrity part, especially dealing with conflicts of interest. Also,
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This note was uploaded on 05/31/2010 for the course ACCT 1237 taught by Professor Hillman during the Spring '10 term at Drake University .

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ACCT - ATC 5-5 - Alex Fish ACCT-042 ACT 5-5 a. $110,000 -...

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