You discover that a glue which your company developed ten years ago can be formed...
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Accounting
You discover that a glue which your company developed ten years ago can be formed into a super bouncy ball if cooked at the right temperature. How should you treat the original $125,000 of R & D expenditures that went into developing the glue in your present capital budgeting analysis of the proposed ball project? a. As a cash outflow at the beginning of the project. b. As a part of the initial investment. c. As a cash inflow since the formula has obviously increased in value. d. As a sunk cost. e. As a sunk cost only if the glue cannot be made by another manufacturer.
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