SW co has a barrel of chemicals in its warehouse that it purchased for a project a while ago at a cost of $1000. It would cost $400 for a professional company to collect the barrel and dispose of it safely. However, chemicals could be used in potential project which is currently being appraised.
What is the relevant cost of using chemicals in a new project proposal?
a) $1000 cost
b) $400 benefit
c) $4000 cost
d) Zero
Sir here in my opinion answer should be zero since it would cost $400 for a professional company to collect the barrel and dispose of it safely. However, if chemicals is used in potential project which is currently being appraised then it would save the outflow of $400. Thus, -400 + 400 = O
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Boo kit mcq 93
7y ago#1If they don't use the chemicals then they pat $400 to dispose of them.
If they do use them in the project then they pay nothing.
So using them in the project means they are saving $400.
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