Multiple Choice
Which of the following is an example of a sunk cost in a capital budgeting decision regarding the replacement of an existing piece of equipment for a profitable business that pays taxes?
A) The disposal (salvage) value of the equipment to be replaced.
B) The original purchase price of the equipment to be replaced.
C) The additional net working capital requirement.
D) The operating cost of the new equipment.
E) Income taxes on the disposal of the equipment to be replaced.
Correct Answer:
Verified
Correct Answer:
Verified
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