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Costs to expand the product offerings

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Please help with the following problem.

Lake City Plastics currently produces plastic plates and silverware. The company is considering expanding its product offerings to include plastic serving trays. Which of the following are cash flows relevant to the new product?

I. molds needed to form the serving trays
II. projected increase in plate and silverware sales if the trays are produced
III. a portion of the production manager's current annual salary of $75,000
IV. raw materials used in the production of the serving trays

A) I and IV only

B) III and IV only

C) I, II, and IV only

D) I, III, and IV only

e) I, II, III, and IV

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Solution Summary

This solution answers a multiple choice question about evaluating costs to expand the product offerings to include plastic serving trays. It discusses which cash flows are relevant to the a new product.

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Corporate Finance
Lake City Plastics currently produces plastic plates and silverware. The company is considering expanding its product offerings to include plastic serving trays. ...

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