When Deciding Whether or Not to Replace Old Equipment with New

question 4

Multiple Choice

When deciding whether or not to replace old equipment with new equipment, the overriding consideration is the

• A) book value of the old equipment.
• B) cost of replacing the old equipment.
• C) salvage value of the old equipment.
• D) difference between future cost savings and the new equipment's costs.

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Definitions:

W-3 Forms

A tax form used in the United States to transmit a summary of all W-2 forms issued by an employer to the Social Security Administration.

Total Federal Income Tax

The sum of all taxes owed to the federal government by an individual or entity in a fiscal year after deductions and credits.

FICA-OASDI

Stands for Federal Insurance Contributions Act - Old Age, Survivors, and Disability Insurance; it's a payroll tax that funds Social Security and Medicare in the United States.

FICA-Medicare

A portion of the Federal Insurance Contributions Act tax that funds Medicare, a federal health insurance program for people who are 65 or older and certain younger people with disabilities.