Problem:
In your new project, you are going to use a machine which has been put into operation for a couple of years. The original investment on these machines was $120,000 and cumulative depreciation is $80,000. If you sell it at its fair market value now, you can get $75,000.
Required:
Question: What will be the opportunity cost of the machine if you use it in the new project?
Please explain in detail and also provide step by step solution.