PLEASE, HELP ME :) THANK YOU Dune Company is replacing an old machine with a new, more efficient machine. Dune purchased the old machine for $600,000 and there is $180,000 of accumulated depreciation recorded on the machine. It has a 10-year remaining useful life and it costs $480,000 per year to operate. The new machine would also have a 10-year useful life, it would cost $1,200,000 and its annual operating costs would be $361,200. If the old machine is replaced, it can be sold for $48,000. Which of the following costs is a sunk cost? $480,000 $420,000 $600,000 $361,200
PLEASE, HELP ME :) THANK YOU Dune Company is replacing an old machine with a new, more efficient machine. Dune purchased the old machine for $600,000 and there is $180,000 of accumulated depreciation recorded on the machine. It has a 10-year remaining useful life and it costs $480,000 per year to operate. The new machine would also have a 10-year useful life, it would cost $1,200,000 and its annual operating costs would be $361,200. If the old machine is replaced, it can be sold for $48,000. Which of the following costs is a sunk cost? $480,000 $420,000 $600,000 $361,200
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:PLEASE, HELP ME :) THANK YOU
Dune Company is replacing an old
machine with a new, more efficient
machine. Dune purchased the old machine
for $600,000 and there is $180,000 of
accumulated depreciation recorded on the
machine. It has a 10-year remaining useful
life and it costs $480,000 per year to
operate. The new machine would also
have a 10-year useful life, it would cost
$1,200,000 and its annual operating costs
would be $361,200. If the old machine is
replaced, it can be sold for $48,000. Which
of the following costs is a sunk cost?
$480,000
$420,000
$600,000
$361,200
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