Fulmer, Inc. has developed a new cosmetic line it calls “Superba,” which it is considering for production and sale. It spent $400,000 over the past year to develop this product and paid engineering consulting fees of $20,000 for advice regarding how its plant layout must be altered if it decides to manufacture the new product. How should Fulmer use this information in its capital budgeting analysis of the Superba project?

Group of answer choices

Neither of these items should be included as part of the initial outlay.

$20,000 should be included as part of the initial outlay.

$400,000 should be included as part of the initial outlay.

$420,000 should be included as part of the initial outlay.

Answer rating: 100% (QA)

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