Oregon Company is considering replacing an old machine that originally cost $95,000. A new machine will cost $900,000, and the old machine can be sold for $25,000. What is the sunk cost in this situation

$ 970,000 are sunk costs.

Explanation:

An old machine     cost $95,000

A new machine cost $900,000,

Old machine can be sold for $25,000

The sunk cost in this situation= $ 900,000 + $ 90,000- $ 25,000= $ 995,000- $ 25,000= $ 970,000

Sunk Cost is the amount that cannot be recovered . In this situation only $ 25,000 can be recovered and $ 970,000 cannot be replaced . This amount will be treated as sunk costs.

The sunk costs are costs that are spent and are irrecoverable .

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whole quiz

1. the sum of all activities involved in getting high-quality products into the marketplace

2.operations

3. the principle of looking at the supply chain as a whole in order to improve the overall flow through the system.

4. produced; performed

5. activities producing tangible products, such as radios, newspapers, buses, and textbooks.

6. activities producing intangible and tangible products, such as entertainment, transportation, and education.

7.   customer focus

8. analyzing a competitor's products to identify desirable improvements

9. the systematic direction and control of the processes that transform resources into finished projects that create value for and provide benefits to consumers.

10. operation management.

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