Note that depreciation of special equipment is listed as one of the costs of producing the shifters internally. Because the equipment has already been purchased, this depreciation is a sunk costs and is therefore irrelevant. If the equipment could be sold, its salvage value would be relevant. Or if the machine could be used to make other products, this could be relevant as well. However, we will assume that the equipment has no salvage value and that it has no other use except making the heavy-duty gear shifters.