Matthews Company Is Considering Replacing Equipment That Originally Cost $250,000

Multiple Choice

Matthews Company is considering replacing equipment that originally cost $250,000 and that has $225,000 accumulated depreciation to date. A new machine will cost $500,000, and the old equipment can be sold for $6,000. What is the sunk cost in this situation?

A) $225,000
B) $25,000
C) $250,000
D) $0