Question: Barans manufacturing is developing the incremental cash flows associated with the proposed replacement of an existing stamping machine with a new, technologically advanced one. Given

Barans manufacturing is developing the incremental cash flows associated with the proposed replacement of an existing stamping machine with a new, technologically advanced one. Given the following costs related to the proposed project, explain whether each would be treated as a sunk cost or an opportunity cost in developing the incremental cash flows associated with the proposed replacement decision. (a) Barans would be able to use the same dies other tools, which had a book value of Rs50, 000, on the new stamping machine that it used on the old one. (b) Barans would be able to link the new machine to its existing computer system in order to control its operations. The old stamping machine did not have a computer control system. The firm’s excess computer capacity could be leased to another firm for an an

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