Chapter 26, Problem 9Q

To determine

Decision-making:

Decision making can be defined as the process of making choices through the identification of a decision, collecting information, and assessing alternative resolutions. The implementation of a step-by-step process of decision making helps in making deliberate and effective decisions through proper organization of relevant information and defining alternatives.

To determine: The meaning of sunk costs and their relevance to a decision to retain or replace equipment.