question archive Newcastle Coal Co
Newcastle Coal Co
Subject:BusinessPrice: Bought3
Newcastle Coal Co. owns a warehouse that it is not currently using. It could sell the warehouse for $300,000 or use the warehouse in a new project. Should Newcastle Coal Co. include the value of the warehouse as part of the initial investment in the new project?
No, because the cost of the warehouse is a sunk cost.
Yes, because the firm could sell the warehouse if it didn't use it for the new project.
No, because the company will still be able to sell the warehouse once the project is complete.
A cell phone company recently gave customers the ability to buy applications that they can download to their cell phones. Allowing customers to use these applications increased cell phone sales. This is an example of.................. externality. (Options: an environmental, a positive with firm, a negative with firm.)
