Okay. It's your turn to try your hand at relevant costs. JKL Company, a startup, is hitting the road to build up brand awareness and hopefully sell some athletic performance shorts, their first product. They purchased a towable camper to use as a pop-up shop. While driving up the southeastern U.S. coast, their camper begins to experience some mechanical issues. They take the camper to a mechanic, who estimates the cost of the repairs will be $2,000. The company's managers consult with their accountant to understand their costs and they're presented with the following information. JKL Company originally paid $10,000 for the camper and could sell it as is for $6,000. A new camper would cost the company $12,000. Follow the steps in our decision making framework and see if you can answer the following questions. What is the decision to be made? What are the alternatives? What information is relevant to making that decision? And which alternative should the company choose? I'll see you in a few minutes at the light board. Take a few minutes and give it a try. How did it go? Let's take a look and see how it went. Well, here we have a couple of alternatives. Our first alternative is to keep the old camper and repair, but the second alternative that we can pursue is to buy a new one and get rid of the old one. So two alternatives. All right. Let's think about the cost of the old camper. The cost of the old camper was $10,000, but we have incurred that $10,000 already, so we would consider that to be a sunk cost, and that's not going to be relevant to our decision. We can either ignore it or we could put $10,000 here and $10000 here, and notice that they're the same between the two alternatives, and then recognize it's not going to affect our decision. Second cost we've got to think about is the cost of repairing the old camper if we decide to do that. So the cost of repairing the old camper would be $2,000. So if we keep the old camper and repair it, we would incur the $2,000, but if we decide to buy the new camper and not keep the old one in repair, we would not incur that $2,000. Great. Okay. So what about the third thing that we need to think about? Well, the third thing we need to think about is the cost of buying a new camper. All right, let's put that here. And if we keep the old camper and repair it, we wouldn't incur any cost of the new camper. So I'll just make sure that we recognize that there, and then if we decide to buy a new camper, of course, we have the cost of the new camper which is $12,000. And then finally, if we keep and repair the old camper, of course, we're not going to sell it, but if we buy the new camper, then what we would do is sell the old camper, and we would obtain some proceeds from doing so. So I'm going to put the sale of the old camper. Here we would not receive any proceeds from selling it because we're not selling it, and here we would receive $6,000 in proceeds from selling that old camper that would offset this $12,000 cost of the new camper. So the total impact financially here, we would be comparing our $2,000 to our $6,000. So we would see $4,000 more cost if we buy a new one than if we keep the old one and repair it. So we would decide to keep the old one and repair it.