Sunk Costs
Response to the following problem:
Sam Love owns and manages a small but growing service business. In fact, this year has been so good that Sam is moving his office to a larger, more centrally located site. In an effort to save on moving costs, Sam employs his brother Dan (who owns a large truck) to haul his office furniture and equipment. Unfortunately, Dan doesn't properly secure the rear door of the truck, and one of Sam's two copy machines winds up in a million pieces in the middle of the highway. As the two brothers survey the damage, Sam's office manager approaches and says, "Well, look on the bright side, the machine was half depreciated."
Should Sam take comfort from this statement? Explain your answer.