Continue with (Alt. 1) or Replace (Alt. 2) Old Machine December 10 Feedback 7 Check My Work For the continue and replace alternatives subtract the costs from the revenues. Multiply the variable production costs for the eight year life. Determine the differential effect on income of the revenues, costs, and income (loss) by subtracting alternative 1 from alternative 2 . a.2 Determine whether to continue with (Alternative 1) or replace (Alternative 2 ) the old machine. b. What is the sunk cost in this situation? The sunk cost is $ Feedback Check My Work Sunk costs are costs that have been incurred in the past, cannot be recouped, and are not relevant to future decisions. Continue with (Alt. 1) or Replace (Alt. 2) Old Machine December 10 Feedback 7 Check My Work For the continue and replace alternatives subtract the costs from the revenues. Multiply the variable production costs for the eight year life. Determine the differential effect on income of the revenues, costs, and income (loss) by subtracting alternative 1 from alternative 2 . a.2 Determine whether to continue with (Alternative 1) or replace (Alternative 2 ) the old machine. b. What is the sunk cost in this situation? The sunk cost is $ Feedback Check My Work Sunk costs are costs that have been incurred in the past, cannot be recouped, and are not relevant to future decisions