Question
Cool Company is considering replacing a machine that is presently used in the production of its product. The following data are available: Replacement Old Machine
Cool Company is considering replacing a machine that is presently used in the production of its product. The following data are available:
Replacement
Old Machine Machine
Original cost $295,000 $188,000
Useful life in years 11 5
Current age in years 6 0
Book value $130,000
Disposal value now $52,000
Disposal value in 5 years 0 0
Annual cash operating costs $39,000 $24,000
The ______________________ is irrelevant.
| a. | original cost of the replacement machine
| |
| b. | disposal value of the old machine
| |
| c. | book value of the old machine
| |
| d. | annual operating cost of the old machine
|
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