$4$ For these two separate cases, identify each item as a sunk cost, a relevant cost, or a relevant revenue.

A company is considering replacing an old machine. The old machine has a book value of $$57,500$ and a remaining five$-$year life. The old machine can be sold now for $$62,500.$ The new machine can be purchased for $$107,500.$

A company spent $$9,500$ to make shirts. Customer tastes have changed and the shirts cannot be sold for their normal price. The shirts can be sold as is to another manufacturer to make into rags for $$8,500.$ Instead, the company can spend $$13,500$ to

$04$:$27$:$43$

rework the shirts with different designs. The reworked shirts can be sold for $$17,500.$

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A company is considering replacing an old machine. The old machine has a book value of $$57,500$ and a remaining five$-$year life. The old machine can be sold now for $$62,500.$ The new machine can be purchased for $$107,500.$

$\backslash$table$[[$Item$,],[$$$57,500$ book value of old machine,Sunk Cost$],[$$$62,500$ selling price of old machine,Relevant Revenue$],[$$$107,500$ price of new machine,Relevant Cost$]]$

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