Question
A company purchased a specialised machine for ₹10 lakh two years ago. Due to technological changes, the machine has no resale value today. The company is evaluating whether to replace it with a new automated machine that would reduce operating costs. While analysing the replacement decision, the accountant suggests considering the original purchase price of ₹10 lakh while computing the cost–benefit analysis. Which of the following best describes the nature of the ₹10 lakh cost?
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