Chapter 2, Problem 7E

To determine

Differential Cost: The Differential cost is the difference in the cost of two or more alternative business decisions. It is also called incremental cost.

Opportunity Cost: Opportunity cost is the potential benefits or profit that will be lost if one alternative decision is chosen over another. It is the cost of an alternative that is foregone.

Sunk Cost: Sunk cost is an expense that has already been incurred and cannot be changed or recovered by any business decisions

Indicate each item given in the problem and classify them as a differential cost, an opportunity cost, or a sunk cost in the decision to replace the old X-ray machine with a new machine. If none of the categories apply for a particular item, leave all columns blanks.