Musical Studios is considering the replacement of end of life equipment. The relevant information is as follows:

REPLACEMENT
	Old Machine	Machine
Original cost	$50,000	$36,000
Useful life in years	20	8
Current age in years	12	0
Book value	$30,000
Disposal value now	$7,500
Disposal value in 8 years	0	0
Cash Operating Costs - Annual	$14,000	$7,500

Using the table provided, what is the sunk cost?

A. The annual cash operating costs of the old equipment

B. The annual cash operating costs of the replacement equipment

C. The disposal value of the old equipment

D. The original cost of the old equipment

2. If the old equipment is replaced, what is the total relevant cost?

A. $58,500

B. $118,500

C. $ 88,500

D. $112,000