Chapter 6, Problem 3CQ

Incremental Cash Flows Your company currently produces and sells steel shaft golf clubs. The board of directors wants you to consider the introduction of a new line of titanium bubble woods with graphite shafts. Which of the following costs are not relevant?

1. a. Land you already own that will be used for the project but otherwise will be sold for 5700,000, its market value.
2. b. A $300,000 drop in your sales of steel shaft clubs if the titanium woods with graphite shafts are introduced.
3. c. $200,000 spent on research and development last year on graphite shafts.