Question

Your company purchased a $5,000 piece of etching equipment for a special order. You are now contacted about a new special order that requires a $7,500 piece of stamping equipment. In working through the analysis of whether to take this new order or turn it down, the original equipment is:

a) An avoidable cost in considering the new order.

b) A sunk cost, since it cannot be used for the new order.

c) Might be able to be reformatted for the new order.

Answer 1

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