Answer the Following Questions Using the Information Below:
Flowers for Everyone

question 132

Multiple Choice

Answer the following questions using the information below:
Flowers For Everyone is considering replacing its existing delivery van with a new one.The new van can offer considerable savings in operating costs.Information about the existing van and the new van follow:
$$\begin{array} { l r r } & \text { Existing van } & \text { New van } \\\text { Original cost } & \$ 100000 & \$ 180000 \\\text { Antual operating cost } & \$ 33000 & \$ 20000 \\\text { Accumulated depreciation } & \$ 60000 & - \\\text { Current salvage value of the existing van } & \$ 45000 & - \\\text { Remaining life } & 10 \text { years } & 10 \text { years } \\\text { Salvage value in 10 years } & \$ 0 & \$ 0 \\\text { Antual depreciation } & \$ 4000 & \$ 18000\end{array}$$
-'Sunk costs' include:

• A)the original cost of the existing van.
• B)the annual operating cost of the new van.
• C)the original cost of the new van.
• D)the current salvage value of the existing van.

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