Breezy Company is considering the replacement of equipment that has a current book value of $340,000. Breezy has an opportunity to sell the equipment for $240,000. The cost of replacing the old equipment with a new machine is $300,000. The cost of operating the new equipment is $20,000 per year less than the cost of operating the old equipment. The new equipment has a 5-year useful life. The amount of the sunk cost for this replacement decision is
A. $240,000
B. $300,000
C. $100,000
D. $340,000
Answer: D
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