Wonderland Company is considering replacing a machine that is presently used in the production of its product. The following data are available:

Replacement

Old Machine Machine

Original cost $333,000 $222,000

Useful life in years 6 5

Current age in years 1 0

Book value $198,000

Disposal value now $132,000

Disposal value in 5 years $10,000 $50,000

Annual cash operating costs $45,000 $34,000

The _______________ is a sunk cost.

		disposal value of the old machine
		original cost of the old machine
		annual cash operating costs of the old machine
		annual cash operating costs of the replacement machine