The Lapley Company has 500 obsolete small tools that are carried in inventory at a total cost of $940,000. If these tools are upgraded at a total cost of $180,000, they can be sold for a total of $300,000. As an alternative, the tools can be sold in their present condition for $80,000.

1. The sunk cost in this situation is:

A) $940,000.

B) $180,000.

C) $ 80,000.

D) $300,000.