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Topaz Company plans to replace an old machine that originally cost $95,000. A new machine will cost $900,000, and the old machine can be sold
Topaz Company plans to replace an old machine that originally cost $95,000. A new machine will cost $900,000, and the old machine can be sold for $25,000. The new machine will generate profits of $100,000 annually for 5 years. However, Topaz can also invest $875,000 in a Certificate of Deposit (CD) yielding 12% annually. What is the sunk cost and the opportunity cost in this situation? a. $95,000 and $25,000 b. $25,000 and $100,000 c. $25,000 and $105,000 d. $95,000
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