Machine Replacement Decision

estimated to be $$99,600$ per year for eight years.

must enter subtracted or negative numbers use a minus sign.

Differential Analysis

Continue with Old Machine $($Alt$.1)$ or Replace Old Machine $($Alt$.2)$

September $13$

Continue with Old Machine $($Alternative $1)$ Replace Old Machine $($Alternative $2)$ Differential Effect on Income $($Alternative $2)$

Revenues:

Proceeds from sale of old machine $

Costs:

Purchase price

Variable productions costs $(8$ years$)$

Income $($Loss$)$

a$\mathrm{.}2$ 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 the $