The Tattle Teller has a printing press sitting idly in its back room.The press has no market value to another printer because the machine utilizes old technology.The firm could get $480 for the press as scrap metal.The press is six years old and originally cost $174,000.The current book value is $3,570.The president of the firm is considering a new project and feels he can use this press for that project.What value, if any, should be assigned to the press as an initial cost of the new project?

Question

Quizplus · Accepted Answer

The value to be assigned to the press as an initial cost of the new project is its opportunity cost, which is the amount that could be obtained if the press were sold as scrap metal, i.e., $480.

The Tattle Teller Has a Printing Press Sitting Idly in Its