Book value of existing equipment is a historical cost and not necessary for deciding equipment replacement, thus it can be considered as

 

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

To answer this question, you must understand each answer choice in the multiple-choice above. So you will find the right answer.

A. operating cost

It is Wrong Because operating cost does not include the correct answer.

B. sunk cost

it is True, because sunk cost is the best and correct answer to the above question. so, choose this answer.

C. in-house cost

Wrong. Because in-house cost is a bad choice for an answer.

D. out-house cost

This is also wrong, out-house cost Not completely the correct answer.

The Answer From Book value of existing equipment is a historical cost and not necessary for deciding equipment replacement, thus it can be considered as

So the correct answer is B i.e. sunk cost. Hopefully, it can help work on your problem and can add to your insight as well.