Which base to close, relevant-cost analysis, opportunity costs? The U.S. Defense Department has the difficult decision of deciding which military bases to shut down. Military and political factors obviously matter, but cost savings are also an important factor. Consider two naval bases located on the West Coast— one in Alameda, California, and the other in Everett, Washington. The Navy has decided that it needs only one of those two bases permanently, so one must be shut down. The decision regarding which base to shut down will be made on cost considerations alone. The following information is available:

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