?H has in inventory 15,000 kg of M, a raw material which it bought for $3/kg five years ago,?for a product line which was discontinued four years ago. M has no use in its existing state?but could be sold as scrap for $1.00 per kg.? One of the company’s current products (HN)?requires 4 kg of a raw material, available for $5.00 per kg.? M can be modified at a cost of?$0.75 per kg so that it may be used as a substitute for this material. However, after?modification, 5 kg of M is required for every unit of HN to be produced.?
?H has now received an invitation to tender for a product which could use M in its present?state.?
What is the relevant cost per kg of M to be included in the cost estimate for the tender??