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5 A manager is considering replacing a piece of old equipment for a more efficient one. It expected that annual maintenance cost for the new
5 A manager is considering replacing a piece of old equipment for a more efficient one. It expected that annual maintenance cost for the new equipment will be $2,000, $10,000 less than the cost currently being incurred to maintain the old equipment. If the new equipment is purchased, the old equipment will be sold for scrap. Which of the following costs is NOT relevant to this decision? O A. The annual maintenance costs of the new equipment. O B. The cost of the new equipment. O C. The expected salvage value of the new equipment when its useful life is over. O D. The original cost of the old equipment. QUESTION 6 The Sweet Dairy Air, Inc., makes and sells ice cream cones. Management is trying to decide whether to have its hourly employees produce the ice cream cones or purchase the cones from an outside vendor. For each of the following items, indicate if it is relevant or irrelevant to this decision. v Wages of Sweet Dairy Air's employees A. Relevant v Salary of Sweet Dairy Air's Production Manager B. Irrelevant Price of the ice cream cones
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