In determining whether to keep a machine or replace it, the original cost of the machine is a sunk cost and is NOT a relevant factor.

Question

Quizplus · Accepted Answer

The original cost of the machine is a sunk cost and cannot be recovered, so it is not relevant to the decision of whether to keep or replace the machine. The decision should be based on the current and future costs and benefits of keeping or replacing the machine.

In Determining Whether to Keep a Machine or Replace It