Management of Plascencia Corporation is considering whether to purchase a new model machine costing $ or a new model machine costing $ to replace a machine that was purchased years ago for $ The old machine was used to make product IL until it broke down last week. Unfortunately, the old machine cannot be repaired.
Management has decided to buy the new model machine. It has less capacity than the new model machine, but its capacity is sufficient to continue making product IL
Management also considered, but rejected, the alternative of simply dropping product IL If that were done, instead of investing $ in the new machine, the money could be invested in a project that would return a total of $
In making the decision to buy the model machine rather than the model machine, the sunk cost was: A B C D
