Fuller Industries is considering replacing a machine that is presently used in its production process.Which of the following amounts represents a sunk cost?

Question

Quizplus · Accepted Answer

A sunk cost is a cost that has already been incurred and cannot be recovered or changed. In this scenario, the cost of the current machine is a sunk cost because it has already been incurred and cannot be recovered, regardless of the decision to replace or keep the machine. The other options represent costs that may be relevant to the decision-making process and are not sunk costs.

Fuller Industries Is Considering Replacing a Machine That Is Presently