A manufacturer purchased and installed a shrink-wrap machine 4 years ago at a cost of Php 200,000. A new machine is now needed, and one is available for Php 350,000 less a Php 50,000 trade-in allowance for the old machine. The market value of the old machine without trade-in on a new model is Php 25,000. Which of the four peso values above is a sunk cost that is irrelevant in a pre-tax engineering economic analysis?   A. Php 200,000   B. Php 350,000   C. Php 50,000   D. Php 25,000

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A manufacturer purchased and installed a shrink-wrap machine 4 years ago at a cost of Php 200,000. A new machine is now needed, and one is available for Php 350,000 less a Php 50,000 trade-in allowance for the old machine. The market value of the old machine without trade-in on a new model is Php 25,000.

Which of the four peso values above is a sunk cost that is irrelevant in a pre-tax engineering economic analysis?

  A.

Php 200,000

  B.

Php 350,000

  C.

Php 50,000

  D.

Php 25,000

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