Discussion
A machine bought for 100 000 five years ago, now worth 25 000, needs 40 000 of repairs to continue. The figure relevant to the decision is
Answer: C
Correct answer: 65 000, the market value plus the repair
Keeping the machine costs two things: the 40,000 that must be spent on it, and the 25,000 that could have been had by selling it instead. Together those are the investment in retention. The 100,000 paid five years ago is sunk and identical whichever course is chosen, so it plays no part.
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