3.XYZ drilling company purchased a high-end CNC milling center at $500,000 two years ago. The expected life of this machine is 10 years and the salvage value at that time $100,000. The company has done a major upgrading for the CNC machine last year, costed $15,000. The company has also spent $150,000 on its material handling system including a docking station, a rotation table, two pallets and an automatic loading/unloading robot arm. The CNC operating cost is $45,000 per year. Due to the recent oil price down turn this year, the company is contemplating to change the business to truck repair, and considering to replace the said CNC machine with a truck repair elevation platform. The current market value for the CNC machine is $250,000; while the supporting machinery would be valued very little, only $10,000, due to their specific functionality and the bad economy situation.What is the total sunk cost related to this replacement decision? Select one: a. $100,000 cross out b. $505,000 cross out c. $390,000 cross out d. $405,000 cross out

3.XYZ drilling company purchased a high-end CNC milling center at $500,000 two years ago. The expected life of this machine is 10 years and the salvage value at that time $100,000. The company has done a major upgrading for the CNC machine last year, costed $15,000. The company has also spent $150,000 on its material handling system including a docking station, a rotation table, two pallets and an automatic loading/unloading robot arm. The CNC operating cost is $45,000 per year. Due to the recent oil price down turn this year, the company is contemplating to change the business to truck repair, and considering to replace the said CNC machine with a truck repair elevation platform. The current market value for the CNC machine is $250,000; while the supporting machinery would be valued very little, only $10,000, due to their specific functionality and the bad economy situation.What is the total sunk cost related to this replacement decision? Select one: a. $100,000 cross out b. $505,000 cross out c. $390,000 cross out d. $405,000 cross out

Name: 3.XYZ drilling company purchased a high-end CNC milling center at $50
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Description: 3.XYZ drilling company purchased a high-end CNC milling center at $500,000 two years ago. The expected life of this machine is 10 years and the salvagevalue at that time $100,000. The company has done a major upgrading for the CNC machine last year,

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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