A company paid $400,000 five years ago for a specialized machine that has no salvage value and is being depreciated at the rate of $40,000 per year. The company is considering using the machine in a new project that will have incremental revenues of $48,000 per year and annual cash expenses of $30,000. In analyzing the new project, the $40,000 depreciation on the machine is an example of a(n): A. Variable cost. B. Out-of-pocket cost. C. Incremental cost. D. Opportunity cost. E. Sunk cost