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One of the employees of Corporation was recently involved in an accident with one of the corporation's delivery trucks. The corporation is either going to
One of the employees of Corporation was recently involved in an accident with one of the corporation's delivery trucks. The corporation is either going to repair the damaged truck or sell it as is and buy a comparable used truck. The accounting department has gather the following information regarding trucks:
Initial cost of the damaged truck | $20,000 |
Accumulated depreciation to date on damaged truck | $16,000 |
Salvage value of truck immediately before crash | $9,000 |
Salvage value of truck immediately after crash | $1,000 |
Cost to repair damaged truck | $5,000 |
Cost to buy a comparable used truck | $11,000 |
Based on the information above, company would be better off financially by:
A $5,000 by repairing the damaged truck.
B $2,000 by buying the comparable truck.
C $1,000 by buying the comparable truck.
D $2,000 by repairing the damaged truck.
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