Fuller Industries Is Considering Replacing a Machine That Is Presently

question 105

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? $$\begin{array} { | l | r | r | } \hline & \text { Old Machine } & \begin{array} { l } \text { Replacement } \\\text { Machine }\end{array} \\\hline \text { Original cost } & \$ 55,000 & \$ 45,000 \\\hline \text { Remaining useful life in years } & 5 & 5 \\\hline \text { Current age in years } & 5 & 0\\\hline \text { Book value } & \$ 30,000 & \\\hline \text { Current disposal value in cash } & \$ 9000 & \$ 0 \\\hline \text { Auture disposal value in cash (in 5 years) } & \$ 8000 & \$ 4500 \\\hline\end{array}$$

• A) $55,000
• B) $30,000
• C) $9000
• D) $45,000

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