Management is considering replacing its blending equipment. The annual costs of operating the old equipment are $250,000. The annual costs of operating the new equipment are expected to be $220,000. The old equipment has a book value of $35,000 and can be sold for $25,000. The cost of the new equipment would be $260,000. Which of these amounts should be considered a sunk cost in deciding whether to replace the old equipment?
A. $250,000
B. $220,000
C. $35,000
D. $25,000