A pulpwood-forming machine was purchased and installed 8 years ago for $50,000. The declared salvage value was

Question:

A pulpwood-forming machine was purchased and installed 8 years ago for $50,000. The declared was $5,000, with a useful life of 10 years. The machine can be replaced with a more efficient model that costs $90,000, including installation. The old machine can be sold on the open market for $20,000. The cost to remove the old machine is $5,000. Which are the relevant costs for the old machine?
Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...