Question
Sala Co. is contemplating the replacement of an old machine with a new one. The following information has been gathered: Old Machine New Machine Price
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Sala Co. is contemplating the replacement of an old machine with a new one. The following information has been gathered:
Old Machine New Machine
Price $300,000 $600,000
Accumulated Depreciation 90,000 -0-
Remaining useful life 10 years -0-
Useful life -0- 10 years
Annual operating costs $240,000 $180,600
If the old machine is replaced, it can be sold for $24,000.
Which of the following amounts is a sunk cost?
$180,600
$210,000
$600,000
$240,000
Sala Co. is contemplating the replacement of an old machine with a new one. The following information has been gathered:
Old Machine New Machine
Price $300,000 $600,000
Accumulated Depreciation 90,000 -0-
Remaining useful life 10 years -0-
Useful life -0- 10 years
Annual operating costs $240,000 $180,600
If the old machine is replaced, it can be sold for $24,000.
Which of the following amounts is a sunk cost?
| $180,600 | ||
| $210,000 | ||
| $600,000 | ||
| $240,000 |
Sala Co. is contemplating the replacement of an old machine with a new one. The following information has been gathered: Old Machine New Machine Price $300,000 $600,000 Accumulated Depreciation 90,000 -0- Remaining useful life 10 years -0- Useful life -0- 10 years Annual operating costs $240,000 $180,600 If the old machine is replaced, it can be sold for $24,000. Which of the following amounts is a sunk cost? $180,600 $210,000 $600,000 $240,000
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Corporate Finance A Focused Approach
Authors: Michael C. Ehrhardt, Eugene F. Brigham
6th edition
978-1305637108
