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    Relevant costs

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    A bat costing 108K is wrecked. It can either be disposed of for 11K and replaced with a similar boat for 110K, or rebuilt for 98K. What is the net relevant cost of replacing the boat?

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    Solution Preview

    The $108K cost is a sunk cost and is not relevant.
    There are ...

    Solution Summary

    The solution explains the use of relevant cost is coming to the correct decision.