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Problem 1: Sal owns a small manufacturing firm. He is deciding whether he should continue to purchase inputs from existing suppliers or manufacture the inputs in his own firm. Assuming Sal is focused on a profitability perspective, which of the following statements is true regarding Sal's decision?
A. Sal will base his decision solely on the issue of input quality.
B. Sal will compare the relevant costs associated with purchasing the inputs versus manufacturing the inputs.
C. Sal will consider the purchase price as irrelevant since he has the option to manufacture the inputs in his own firm.
D. Sal will consider the cost to manufacturing the inputs as irrelevant since he is already purchasing the inputs from existing suppliers.
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