Crane Company is contemplating the replacement of an old machine with a new one. The following information has been gathered: Old Machine New Machine Price $360000 $630000 Accumulated Depreciation 90000 -0- Remaining useful life 10 years -0- Useful life -0- 10 years Annual operating costs $280000 $190600 If the old machine is replaced, it can be sold for $24000. Which of the following amounts is a sunk cost? ○ $190600 O $280000 ○ $270000 O $630000
Crane Company is contemplating the replacement of an old machine with a new one. The following information has been gathered: Old Machine New Machine Price $360000 $630000 Accumulated Depreciation 90000 -0- Remaining useful life 10 years -0- Useful life -0- 10 years Annual operating costs $280000 $190600 If the old machine is replaced, it can be sold for $24000. Which of the following amounts is a sunk cost? ○ $190600 O $280000 ○ $270000 O $630000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Crane Company is contemplating the replacement of an old machine with a new one. The following information has been gathered:
Old Machine
New Machine
Price
$360000
$630000
Accumulated Depreciation
90000
-0-
Remaining useful life
10 years
-0-
Useful life
-0-
10 years
Annual operating costs
$280000
$190600
If the old machine is replaced, it can be sold for $24000.
Which of the following amounts is a sunk cost?
○ $190600
O $280000
○ $270000
O $630000
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