A Company Purchases Machinery Costing $60,000 in October of 2014

Multiple Choice

A company purchases machinery costing $60,000 in October of 2014. Five years later, management discovers better, more efficient machine that could be purchased for $80,000 to replace the existing machine. Management has determined that they are able to sell the original machine for $15,000. In making the decision about buying the new machine, how much are total sunk costs?

A) $60,000
B) $80,000
C) $15,000
D) $20,000