Question
Laura Industries is considering replacing a machine that is presently used in its production process. The following information is available: Old Machine Replacement Machine Original
Laura Industries is considering replacing a machine that is presently used in its production process. The following information is available:
|
| Old Machine | Replacement Machine |
| Original cost | $35,000 | $45,000 |
| Remaining useful life in years | 1 | 5 |
| Current age in years | 5 | 0 |
| Book value | $5,000 |
|
| Current disposal value in cash | $3,000 |
|
| Future disposal value in cash (in 5 years) | $0 | $2,000 |
| Annual cash operating costs | $7,000 | $4,000 |
Required:
Of the information provided above, which are irrelevant to decisions regarding replacing the machine?
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Financial Accounting And Analysis For Students From Non Accounting Background
Authors: Raja Mizan
1st Edition
979-8431276866
