Management of childers corporation is considering whether to purchase a new model 370 machine costing $459,000 or a new model 240 machine costing $415,000 to replace a machine that was purchased 4 years ago for $423,000. the old machine was used to make product m25a until it broke down last week. unfortunately, the old machine cannot be repaired. management has decided to buy the new model 240 machine. it has less capacity than the new model 370 machine, but its capacity is sufficient to continue making product m25a. management also considered, but rejected, the alternative of simply dropping product m25a. if that were done, instead of investing $415,000 in the new machine, the money could be invested in a project that would return a total of $433,000. in making the decision to buy the model 240 machine rather than the model 370 machine, the sunk cost was:

Afirm wants to hire a project manager (pm) at a salary of $100,000. 30% of pms have high ability, and 70% of pms have low ability. high ability pms generate $120,000 in revenue and low ability pms generate $80,000 in revenue. in addition to differences in productivity, high and low ability pms have different outside offers. if a high ability pm is not hired by the firm, she can work for another company at a salary of $80,000. if the low ability pm is not hired by the firm, she can work for another company for $70,000. high ability pms are also able to get a project management professional (pmp) certification at a cost of $1,000. low ability pms are unable to get a pmp certification (they would fail the test). the firm is not able to observe a pm’s ability, but is able to observe and verify whether or not the pm has a pmp certificate.(a) draw the extensive form of the game. expert answer