ACCOUNTING-Machine A Machine B Incremental Cost (B – A)

Machine A

Machine B

Incremental Cost (B – A)

Purchase price

$25,000

$28,000

$3,000

Cash Operating costs

5,000

4,000

(500)

Depreciation of old equip

1,500

1,500

0

The
incremental costs are purchase price ($3,000) and cash operating costs ($500). Here
is a question for you based on the information in the table. What are the sunk
costs, if any, in this situation?

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