Book value of existing equipment is a historical cost and not necessary for deciding equipment replacement, thus it can be considered as
A. operating cost
B. sunk cost
C. in-house cost
D. out-house cost
Answer: Option B
Solution(By Examveda Team)
Book value of existing equipment is a historical cost and not necessary for deciding equipment replacement, thus it can be considered as sunk cost. A sunk cost is a cost that an entity has incurred, and which it can no longer recover.This Question Belongs to Management >> Management Accounting
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