Toronto Moon Printing is looking at an opportunity of setting up a new producti…
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Toronto Moon Printing is looking at an opportunity of setting up a new production facility, which requires the purchase of a new printing press that costs $1 million. The costs to install the machine are $60,000. The new facility is to be built on a piece of land that the company bought for $150,000 five years ago. The market value of the land is $250,000. The R&D costs associated with the investment opportunity were $50,000. In addition, the company will need to purchase $40,000 additional inventory for the project use. How much of these costs can be categorized as a sunk cost?