Question

The project will require an initial investment of $20,000, but the project will also be using a company-owned truck that is not currently being used. This truck could be sold for $12,000, after taxes if the project is rejected, What should Garida do to take this information into account?a. The company does not need to do anything with the value of the truck because the truck is a sunk costb. Increase the NPY of the project by $12,000,c. Increase the amount of the initial investment by $12,000.

Answer 1

c. Increase the amount of the initial investment by $12,000.

Step-by-step explanation:

The amount of investment has to be increased by $12,000 because the truck constitutes an investment into the project and this should be accounted for