Firm X Is Considering the Replacement of an Old Machine

question 11

Multiple Choice

Firm X is considering the replacement of an old machine with one that has a purchase price of $70,000.The current market value of the old machine is $25,000 but the book value is $32,000.What is the net cash outflow for the new machine with consideration for the sale of the old machine?

• A) $70,000
• B) $45,000
• C) $38,000
• D) $32,000

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