Warner Corporation purchased a machine 7 years ago for $337,000when it launched product P50. Unfortu

Warner Corporation purchased a machine 7 years ago for $337,000when it launched product P50. Unfortunately, this machine hasbroken down and cannot be repaired. The machine could be replacedby a new model 300 machine costing $326,800 or by a new model 200machine costing $279,000. Management has decided to buy the model200 machine. It has less capacity than the model 300 machine, butits capacity is sufficient to continue making product P50.Management also considered, but rejected, the alternative ofdropping product P50 and not replacing the old machine. If thatwere done, the $279,000 invested in the new machine could insteadhave been invested in a project that would have returned a total of$395,000. Required: 1. What is the total differential cost regarding the decision tobuy the model 200 machine rather than the model 300 machine? 2. What is the total sunk cost regarding the decision to buy themodel 200 machine rather than the model 300 machine? 3. What is the total opportunity cost regarding the decision toinvest in the model 200 machine? . . .

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