QUESTION 8 Sugar Land Steel Corporation The capital budgeting...
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QUESTION 8 Sugar Land Steel Corporation The capital budgeting committee of the Sugar Land Steel Corporation is evakuating the possibility of replacing ts old pipe-bending machine with a mon model Information on the existing machine and the new model follows Original cost Market value now Market value in year 5 Annual cash operating costs Remaining life $200,000 8o,000 $400, 000D 20,000 10,000 40,000 s yrs. Refer to Sugar Land Steel Corporation The $80,000 market vakue of the existing machine is O a an opportunity cost of continuing using the old machine O b irrelevant to the equipment replacement decision O c. a historical cost O d a sunk cost
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