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Discuss about the variable cost of ownership

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Question: A firm bought a used machine 2 years ago for $1500. When new, the machine cost $8000. Today it could be sold for for $500. Which of the following statements is true? and why?

A) The fixed cost for operating the machine can be ignored in any analysis.

B) The exist8000 purchase price is not included in the analysis.

C) The exist1500 paid 2 years ago is included in the analysis.

D) The variable cost of ownership is the difference between what was paid and what the machine is now worth ($1500 - $500 = $1000).

Reference no: EM131776477

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