If a decision must be made to replace a machine,the book value of the existing machine is a sunk cost.

Name: If a decision must be made to replace a machine,the book value of the existing machine is a sunk cost.
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Question

Quizplus · Accepted Answer

The book value of an existing machine is a historical cost that has already been incurred and cannot be recovered regardless of the decision to replace or keep the machine. Therefore, it is considered a sunk cost and should not be used as a factor in the decision-making process.

If a Decision Must Be Made to Replace a Machine,the