Cocoa Beach Company Is Considering Replacing a Machine That Is

question 61

Multiple Choice

Cocoa Beach Company is considering replacing a machine that is presently used in the production of its product.The following data are available: $$\begin{array} { l r r } & \text { Old Machine } & \begin{array} { r } \text { Replacement } \\\text { Machine }\end{array} \\\text { Original cost } & \$ 200,000 & \$ 160,000 \\\text { Useful life in years } & 10 & 5 \\\text { Current age in years } & 5 & 0 \\\text { Book value } & \$ 100,000 & - \\\text { Disposal value now } & \$ 32,000 & - \\\text { Disposal value in 5 years } & 0 & 0 \\\text { Annual cash operating costs } & \$ 20,000 & \$ 14,000\end{array}$$ Ignoring income taxes, the difference in cost between the old and new machine is _____.

• A)$98,000 in favor of the old machine
• B)$98,000 in favor of the new machine
• C)$40,000 in favor of the new machine
• D)$12,000 in favor of the new machine

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Definitions:

Chinese Immigrants

Individuals from China who have migrated to another country, with significant waves occurring during the 19th and early 20th centuries, often facing various challenges and discrimination.

Transcontinental Railroad

First line across the continent from Omaha, Nebraska, to Sacramento, California, established in 1869 with the linkage of the Union Pacific and Central Pacific railroads at Promontory, Utah.

Assimilation Levels

describe the degree to which a minority group has adopted the cultural norms and values of the dominant society.

Aboriginals

Indigenous peoples native to a land or region, especially referring to the First Nations, Inuit, and Métis peoples of Canada.