AFM – Investment appraisal – Tramont Co

Hello

Grateful if you could explain the implications of below statement. Its part of the Tramont Co question in the BPP revision kit:

It is expected that the financial impact of the gradual closure over the four years will be cost neutral (the revenue from sale of assets will equal the closure costs). If production is stopped immediately, the excess assets would be sold for $2.3 million and the costs of closure, including redundancy costs of excess labour, would be $1.7
million.

Thank you for your help.

Kind regards