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| A printing company is considering replacing an old printing press. The old printing press has a book value of $24,000 and a trade-in value of $14,000. A new printing press would cost $85,000 after trade-in of the old press. It is estimated that the new printing press would reduce operating costs by $20,000 per year. If the company decides not to purchase the new press, the $85,000 could instead be used to retire debt that is currently costing $9,000 per year in interest. Which of the given amounts is an example of a sunk cost? A. The trade-in value of the old printing press. B. The estimated reduction in operating costs. C. The book value of the old printing press. D. The interest on the existing debt. |