A company paid $200,000 ten years ago for a specialized machine that has no salvage value and is being depreciated at the rate of $10,000 per year. The company is considering using the machine in a new project that will have incremental revenues of $28,000 per year and annual cash expenses of $20,000. In analyzing the new project, the $10,000 depreciation on the machine is an ex of a(n):

a. Incremental cost.

b. Opportunity cost.

c. Variable cost.

d. Sunk cost.

e. Out-of-pocket cost.