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Breezy Company is considering the replacement of equipment that has a current book value of $380,000....

Breezy Company is considering the replacement of equipment that has a current book value of $380,000. Breezy has an oppprtunity to sell the equipment for $280,000. The cost of replacing the old equipment with a new machine is $340,000. The cost of operating the new equipment is $22,000 per year less than the cost of operating the old equipment. The new equipment has a 5-year useful life. The amount of the sunk cost for this replacement decision is

rev: 11_19_2018_QC_CS-148164

Multiple Choice

  • $340,000

  • $380,000

  • $280,000

  • $100,000

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