Ernie Company Is Considering Replacing a Machine That Is Presently

question 35

Multiple Choice

Ernie Company is considering replacing a machine that is presently used in the production of its product.The following data are available: $$\begin{array} { l r r } & \text { Old Machine } & \begin{array} { r } \text { Replacement } \\\text { Machine }\end{array} \\\text { Original cost } & \$ 295,000 & \$ 188,000 \\\text { Useful life in years } & 11 & 5 \\\text { Current age in years } & 6 & 0 \\\text { Book value } & \$ 130,000 & - \\\text { Disposal value now } & \$ 52,000 & - \\\text { Disposal value in } 5 \text { years } & 0 & 0 \\\text { Annual cash operating costs } & \$ 39,000 & \$ 24,000\end{array}$$ 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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Definitions:

Existentialism

The approach to philosophy that focuses on conscious experience (phenomenology), free will, the meaning of life, and other basic questions of existence.

Sartre

Jean-Paul Sartre, a French existentialist philosopher, playwright, and novelist known for his exploration of freedom, existentialism, and the human condition.

Nietzsche

A German philosopher known for his exploration of individual morality, the will to power, and the critique of religion.

Optimistic View

A tendency to look on the more favorable side of events or conditions and to expect the most favorable outcome.