Delaney company is considering replacing equipment which originally cost $600,000 and which has $420,000 accumulated depreciation to date. a new machine will cost $790,000 and the old equipment can be sold for $18,000. what is the sunk cost in this situation?

From the given original cost and the total accumulated depreciation of the old equipment, it can be seen that the value of the equipment should still be $180,000.

salvage value = $600,000 - $420,000 = $180,000

Given that it can be sold for only $18,000, the sunken cost is $162,000.

sunken cost = $180,000 - $18,000 = $162,000