When Considering Which Values to Use in Investment Appraisal,only "Relevant

question 3

Multiple Choice

When considering which values to use in Investment Appraisal,only "Relevant Costs" are used.
A company has identified the following costs involved in a project:
(i) Project Manager salary £30,000.The Project Manager is currently an accountant paid £28,000 - when the project starts,a new accountant will be employed at a cost of £20,000.
(ii) The Project Office will be located in a current office; rent is £3,000.
(iii) The additional income is expected to be £400,000 before tax,which is payable at 30%
The Relevant Costs are:

• A) £30,000 salary, £3,000 rent, £400,000 income
• B) £22,000 salary, nil rent, £280,000 income
• C) £30,000 salary, £3,000 rent, £280,000 income
• D) £30,000 salary, nil rent, £280,000 income