While developing a new product line, cook company spent $3 million two years ago to build a plant for a new product. it then decided not to go forward with the project, so the building is available for sale or for a new product. cook owns the building free and clear⎯there is no mortgage on it. which of the following statements is correct?
a. since the building has been paid for, it can be used by another project with no additional cost. therefore, it should not be reflected in the cash flows for any new project.
b. if the building could be sold, then the before-tax proceeds that would be generated by any such sale should be charged as a cost to any new project that would use it.
c. this is an example of an externality, because the very existence of the building affects the cash flows for any new project that rowell might consider.
d. if there is a mortgage loan on the building, then the interest on that loan would have to be charged to any new project that used the building.
e. none of the above.

Aeuropean aircraft producer has spent 15 years in developing a new aircraft that would potential threaten long-lasting boeing's dominance (monopoly) in the same class of aircrafts. the new european aircraft gets high marks on all performance measures except noise. because of the noise, the european producers management is concerned that the us government may impose restrictions which would forbid their aircraft to land in some of the american airports. without restrictions the estimated (present discounted) profit would be 125 million usd. with the restrictions the profit would only be 25 million usd. the chances of both outcomes are estimated to be 50-50. management must decide now whether to the cost of redesign program problem and a 60% chance it will fail. should the european aircraft producer start the noise redesign program if they do not have any redesign parts of the aircraft to solve the noise problem. is 25 million usd. there is a 40% chance that redesign will solve the noise additional information than mentioned above? draw the decision tree, indicate probabilities and outcomes of the events * imagine that the company could find out in advance the outcome of the u.s. government's e find the expected value of perfect information about the u.s. government's decision. decision. draw a new decision tree, indicate probabilities and outcomes of the events.