Home Industries Is Considering Replacing a Machine That Is Presently

question 23

Multiple Choice

Home Industries is considering replacing a machine that is presently used in its production process.Which of the following amounts represents a sunk cost? $$\begin{array} { | l | r | r | } \hline & \text { Old Machine } & \begin{array} { l } \text { Replacement } \\\text { Machine }\end{array} \\\hline \text { Original cost } & \$ 55,000 & \$ 45,000 \\\hline \text { Remaining useful life in years } & 5 & 5 \\\hline \text { Current age in years } & 5 & 0\\\hline \text { Book value } & \$ 33,000 & \\\hline\text { Current disposal value in cash }&\$9,000\\ \hline \text { Furrent disposal value in cash (in } 5 \text { years) } & \$ 0 & \$ 0 \\\hline \text { Annual cash operating costs } & \$ 8,000 & \$ 4,000 \\\hline\end{array}$$

• A)$55,000
• B)$33,000
• C)$9,000
• D)$45,000

---

Definitions:

Personal Gain

The benefit or advantage that an individual receives or seeks from an action or decision, usually at the expense of others or ethical norms.

Transformational Leader

A style of leadership that inspires positive change in followers, motivating them to exceed expectations by fostering a company culture of accountability and growth.

Referent Power

A type of power that stems from personal traits and respect or admiration, compelling others to identify with the person having such qualities.

Personal and Professional Development

The continuous process of acquiring new skills, knowledge, and experience in both personal and professional life to enhance performance and personal growth.