Homework Answers
Differential cost is the difference between repair cost and the purchase cost
= 396350-349800
= $46,550
2.Sunk cost is the cost already incurred and cannot be changed
It is the cost incurred 7 years ago i.e. $405,000
3.Opportunity cost is the value of next best alternative use lost
i.e. Profit from another project i.e. $450,600
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