a. Design cost for the chips
b. Potential lost sales of the current? chips, the C4
c. Proportional cost of the corporate jet lease
d.? Start-up investment in raw materials
e. Upgrades to the chip fabrication facility required if the chip is produced
f. Market research done to guide the development of the new chip
g. Market value of land and buildings where new chip will be produced
a. Design cost for the chips. ?(Select the best choice?below.)
A.This is relevant because it is an investment in working capital.
B.This is irrelevant as it represents existing overhead.
C.This is irrelevant because it is a sunk cost.
D.This is relevant as it represents cannibalization of existing sales.
b. Potential lost sales of the C4 chips. ?(Select the best choice? below.)
A.This is irrelevant because it is a sunk cost.
B.This is relevant as it represents cannibalization of existing sales.
C.This is relevant because it is an investment in working capital.
D.This is irrelevant as it represents existing overhead.
c. Proportional cost of the corporate jet lease. ?(Select the best choice? below.)
A.This is relevant because it is an investment in working capital.
B.This is irrelevant because it is a sunk cost.
C.This is irrelevant as it represents existing overhead.
D.This is relevant as it is a capital investment.
d.? Start-up investment in raw materials. ?(Select the best choice? below.)
A.This is relevant because it is an investment in working capital.
B.This is irrelevant because it is a sunk cost.
C.This is relevant as it represents cannibalization of existing sales.
D.This is irrelevant as it represents existing overhead.
e. Upgrades to the chip fabrication facility required if the chip is produced. ?(Select the best choice?below.)
A.This is irrelevant because it is a sunk cost.
B.This is irrelevant as it represents existing overhead.
C.This is relevant as it represents cannibalization of existing sales.
D.This is relevant as it is a capital investment.
f. Market research done to guide the development of the new chip. ?(Select the best choice? below.)
A.This is relevant as it is a capital investment.
B.This is relevant because it is an investment in working capital.
C.This is relevant as an opportunity cost of using the land and buildings on the new chip.
D.This is irrelevant because it is a sunk cost.
g. Market value of land and buildings where new chip will be produced. ?(Select the best choice? below.)
A.This is relevant because it is an investment in working capital.
B.This is relevant as an opportunity cost of using the land and buildings on the new chip.
C.This is irrelevant because it is a sunk cost.
D.This is irrelevant as it represents existing overhead
