Relevant cost for machine

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November 2, 2011 at 5:39 pm #50243
tbm13
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A company has a machine with a net value of (I believe) 20000. The machine is no longer used in production. The machine can be sold for 25000. The company is starting a new product and needs to purchase a machine at a price of 40000. However, the existing machine could be used for this new product. What is the relevant cost?
November 7, 2011 at 1:27 pm #89131
Vipin
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the relevant cost should be 25 k.
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