The Trump International Hotel & Tower is a five-star hotel located in downtown Toronto. The hotel's operations vice president would like to replace the hotel's legacy computer terminals at the registration desk with attractive state-of-the-art flat-panel displays. The new displays would take less space, consume less power than the old computer terminals, and provide additional security since they can be viewed only from a restrictive angle. The new computer displays would not require any new wiring. However, the hotel's chef believes the funds would be better spent on a new bulk freezer for the kitchen. Submission Instructions 2. Classify each item as a differential cost, an opportunity cost, or a sunk cost in the decision to replace the old computer terminals with new flat-panel displays. Add an "X" in the right field. If none of the categories apply for a particular item, select "None". Item Differential Cost Opportunity Cost Sunk Cost None Cost of the old computer terminals Rent on the space occupied by the registration desk Benefits from a new freezer Cost of removing the old computer terminals Cost of the new flat-panel displays Wages of registration desk personnel Cost of existing registration desk wiring

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Chapter11: Capital Budgeting Decisions
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Question 1.4
The Trump International Hotel & Tower is a five-star hotel located in downtown Toronto. The hotel's
operations vice president would like to replace the hotel's legacy computer terminals at the
registration desk with attractive state-of-the-art flat-panel displays. The new displays would take less
space, consume less power than the old computer terminals, and provide additional security since they
can be viewed only from a restrictive angle. The new computer displays would not require any new
wiring. However, the hotel's chef believes the funds would be better spent on a new bulk freezer for
the kitchen.
Submission Instructions
2. Classify each item as a differential cost, an opportunity cost, or a sunk cost in the decision to
replace the old computer terminals with new flat-panel displays. Add an "X" in the right field. If
none of the categories apply for a particular item, select "None".
Item
Differential Cost
Opportunity Cost
Sunk Cost
None
Cost of the old computer terminals
Rent on the space occupied by the
registration desk
Benefits from a new freezer
Cost of removing the old computer
terminals
Cost of the new flat-panel displays
Wages of registration desk
personnel
Cost of existing registration desk
wiring
Transcribed Image Text:Question 1.4 The Trump International Hotel & Tower is a five-star hotel located in downtown Toronto. The hotel's operations vice president would like to replace the hotel's legacy computer terminals at the registration desk with attractive state-of-the-art flat-panel displays. The new displays would take less space, consume less power than the old computer terminals, and provide additional security since they can be viewed only from a restrictive angle. The new computer displays would not require any new wiring. However, the hotel's chef believes the funds would be better spent on a new bulk freezer for the kitchen. Submission Instructions 2. Classify each item as a differential cost, an opportunity cost, or a sunk cost in the decision to replace the old computer terminals with new flat-panel displays. Add an "X" in the right field. If none of the categories apply for a particular item, select "None". Item Differential Cost Opportunity Cost Sunk Cost None Cost of the old computer terminals Rent on the space occupied by the registration desk Benefits from a new freezer Cost of removing the old computer terminals Cost of the new flat-panel displays Wages of registration desk personnel Cost of existing registration desk wiring
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