Fuller Industries Is Considering Replacing a Machine That Is Presently

question 120

Multiple Choice

Fuller Industries is considering replacing a machine that is presently used in its production process.Which of the following amounts represents a sunk cost? $\begin{array}{|l|r|r|} \hline& \text { Old Machine } & \begin{array}{c}\text { Replacement } \\\text { Machine }\end{array} \\\hline \text { Original cost } & \$ 60,000 & \$ 46,000 \\\hline \text { Remaining useful life in years } & 5 & 5\\\hline \text { Current age in years } & 5&0 \\\hline \text { Book value } & \$ 33,000 \\\hline \text { Current disposal value in cash } & \$ 9000 & \\\hline \text { Future disposal value in cash (in 5 years) } & \$ 0 & \$ 0 \\\hline \text { Annual cash operating costs } & \$ 8000 & \$ 4500 \\\hline\end{array}$

• A)$60,000
• B)$33,000
• C)$9000
• D)$46,000

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Definitions:

Dental Decay

The breakdown of teeth due to acids made by bacteria; also known as cavities or caries.

Neolithic

Relating to the last phase of the Stone Age, characterized by the development of agriculture and the making of polished stone tools.

Domesticates

Plants or animals that have been selectively bred and genetically modified by humans over generations to live alongside them, often for the purpose of food, clothing, or work.

Seasonally

Pertains to changes, events, or patterns that occur at specific times of the year, typically related to natural cycles of the Earth's climate system.