A manufacturer purchased and installed a shrink-wrap machine 4 years ago at a cost of Php 200,000. A new machine is now needed, and one is available for Php 350,000 less a Php 50,000 trade-in allowance for the old machine. The market value of the old machine without trade-in on a new model is Php 25,000. Which of the four peso values above is a sunk cost that is irrelevant in a pre-tax engineering economic analysis? A. Php 200,000 B. Php 350,000 C. Php 50,000 D. Php 25,000
A manufacturer purchased and installed a shrink-wrap machine 4 years ago at a cost of Php 200,000. A new machine is now needed, and one is available for Php 350,000 less a Php 50,000 trade-in allowance for the old machine. The market value of the old machine without trade-in on a new model is Php 25,000. Which of the four peso values above is a sunk cost that is irrelevant in a pre-tax engineering economic analysis? A. Php 200,000 B. Php 350,000 C. Php 50,000 D. Php 25,000
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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ECONOMICS
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A manufacturer purchased and installed a shrink-wrap machine 4 years ago at a cost of Php 200,000. A new machine is now needed, and one is available for Php 350,000 less a Php 50,000 trade-in allowance for the old machine. The market value of the old machine without trade-in on a new model is Php 25,000.
Which of the four peso values above is a sunk cost that is irrelevant in a pre-tax
A. |
Php 200,000 |
|
B. |
Php 350,000 |
|
C. |
Php 50,000 |
|
D. |
Php 25,000 |
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