Use the Following Information for Questions
Chung Inc If the Old Equipment Is Replaced Now, It Can Be

question 20

Multiple Choice

Use the following information for questions
Chung Inc. is considering the replacement of a piece of equipment with a newer model. The following data has been collected: $\begin{array}{lrr}&\text { Old Equipment}&\text { New Equipment }\\\text { Purchase price } & \$ 225,000 & \$ 375,000 \\\text { Accumulated depreciation } & 90,000 & -0- \\\text { Annual operating costs } & 300,000 & 240,000\end{array}$ If the old equipment is replaced now, it can be sold for $60,000. Both the old equipment's remaining useful life and the new equipment's useful life is 5 years.
-What is the net cost of the new equipment?

• A) $375,000
• B) $315,000
• C) $150,000
• D) $75,000

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Definitions:

Philosophy

The study of the fundamental nature of knowledge, reality, and existence, especially when considered as an academic discipline.

Epictetus

A Greek Stoic philosopher who emphasized the importance of personal freedom and responsibility in achieving happiness.

Hedonism

A philosophical theory suggesting that pleasure or happiness is the highest good and utmost aim of human life.

Epicurus

An ancient Greek philosopher who founded Epicureanism, a philosophy that taught the pursuit of happiness through the elimination of pain and fear, emphasizing simple pleasures, friendship, and a contemplative life.