53.12
12. You are finalizing your capital
budgeting analysis on whether to proceed with a new plant and are
almost ready to present it to your boss. One of your particularly
lazy and dim-witted team members comes sauntering in at the last
minute and starts arguing about some of the details. He states
that the analysis should not have included the land that the
plant will be built-on because it's already bought and paid-for.
He further argues that you've neglected to include the cost of
the exploratory engineering design completed last year when this
project was first conceived. Explain exactly what is wrong with
his arguments. [6 pts]