Matthews Company Is Considering Replacing Equipment That Originally Cost $250,000

question 90

Multiple Choice

Matthews Company is considering replacing equipment that originally cost $250,000 and that has $225,000 accumulated depreciation to date. A new machine will cost $500,000, and the old equipment can be sold for $6,000. What is the sunk cost in this situation?

• A) $225,000
• B) $25,000
• C) $250,000
• D) $0

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