Question 13 837% 880% QUESTION 13 Julia\'s Jewelers markets a new line of diamon

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Question 13



837% 880% QUESTION 13 Julia's Jewelers markets a new line of diamond jewelery each year. Which of the following is NOT relevant to determining whether to take the project? Julia's already incurred a cost of $38,000 to develop the new line of jewelry Sales of the new design compliment an existing line of pearl jewelry. Sales of the diamonds are expected to result in an increase of $350,000 in sales of the pearl jewelry Releasing a new line of diamond jewery requires an increase in working capital of S218.000 The company's marginal corporate tax rate is currently 35%. Julia's new design replaces an old design. The old design earned $465,000 in sales QUESTION 14 Click Save and Submit to save and submit. Click Save All Answers to save all anscers Save All Answers ype here to search

Explanation / Answer

13)

Costs incurred in the past are sunk costs. Sunk costs irrelevant costs. In capital bugdeting decisions, all the relevant costs must be considered. Irrelevant costs should be ignored.

Hence, correct option is "$38,000 to develop new line of jewellary"

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