Raptor Company Is Considering Replacing Equipment Which Originally Cost $500,000

question 41

Multiple Choice

Raptor Company is considering replacing equipment which originally cost $500,000 and which has $420,000 accumulated depreciation to date. A new machine will cost $790,000 and the old equipment can be sold for $8,000. What is the sunk cost in this situation?

• A) $72,000
• B) $80,000
• C) $88,000
• D) $290,000

---

Definitions:

Multi-leaf Suspension

A type of vehicle suspension system made up of several layers of metal springs to provide support and absorb shocks.

Rubber Load Cushion

A component made of rubber designed to absorb shock and reduce vibration in various applications, including the loading of goods.

Equalizing Beams

Used in suspension systems, especially in heavy vehicles, to distribute load evenly across multiple axles for improved stability and wear reduction.

Frame Brackets

Components used to attach various parts to the main frame of a vehicle, providing structural support.