Boston Bakers
Boston Bakers Is Trying to Decide Whether It $\text {\underline{ Old machine} }$

Multiple Choice

Boston Bakers
Boston Bakers is trying to decide whether it should keep its existing bread-making machine or purchase a new one that has technological advantages (which translate into cost savings) over the existing machine.Information on each machine follows:
                                                                        $\text {\underline{ Old machine} }$    $\text {\underline{ New machine} }$
$\begin{array}{lll}\text { Original cost } & \$ 10,000 && \$ 25,000 \\\text { Accumulated depreciation } & 6,000 && 0 \\\text { Annual cash operating costs } & 9,500& & 5,000 \\\text { Current salvage value of old machine } & 2,500 & \\\text { Salvage value in } 10 \text { years } & 650 && 1,200 \\\text { Remaininglife } & 12\text { yrs } &&12 yrs\end{array}$






Refer to Boston Bakers.The $10,000 cost of the original machine represents a(n)

A) sunk cost.
B) future relevant cost.
C) historical relevant cost.
D) opportunity cost.