PC Express is evaluating the purchase of a new machine that will cost $300 000. The company bought the existing machine for $200 000 five years ago and can sell it today for $50 000. What is the marginal cost of buying the new machine?
A) $250 000
B) $100 000
C) $300 000
D) $50 000

Question

Quizplus · Accepted Answer

The marginal cost of buying the new machine is the cost of the new machine ($300,000) minus the sale price of the existing machine ($50,000), which equals $250,000.

PC Express Is Evaluating the Purchase of a New Machine