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3) A manager invests $400,000 in a technology to reduce overall costs of production. The company managed to reduce their cost per unit from $2 to $1....

3) A manager invests $400,000 in a technology to reduce overall costs of production. The company managed to reduce their cost per unit from $2 to $1.85. After a year, the manager has an opportunity to outsource production to another company at a cost per unity of $1.75. If you are the manager, you

a) should consider the $400,000 as sunk cost and therefore it should not be relevant to the decision.

b) should base your decision upon economic profit and not accounting profit

c) should avoid the fixed-cost fallacy

d) all the above

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