Tabitha Company Is Considering Replacing a Machine That Is Presently

question 6

Multiple Choice

Tabitha Company is considering replacing a machine that is presently used in the production of its product. The following data are available: $\begin{array}{lll}&& \text { Replacement } \\&\text { Old Machine } & \text { Machine }\\\text { Origin al cost } & \$ 60,000 & \$ 35,000 \\\text { Useful lif in years } & 10 & 5 \\\text { Current age in years } & 5 & 0 \\\text { Book value } & \$ 25,000 & - \\\text { Disposal value now } & \$ \$, 000 & - \\\text { Disposal value in 5 years } & 0 & 0 \\\text { Annual cash operating costs } & \$ 10,000 & \$ 4,000\end{array}$ The total relevant costs to consider if the old machine is kept are:

• A) $50,000
• B) $30,000
• C) $52,000
• D) $60,000

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Definitions:

Political Decision-making

The process of making decisions within the framework of a political entity or organization, often involving considerations of power, policy, and governance.

Groupthink Causes

Factors that lead to groupthink, a psychological phenomenon where the desire for harmony and conformity in a group results in irrational or dysfunctional decision-making outcomes.

Voting

The act of making a choice among options or deciding in an election or poll, typically done secretly.

Discussion to Consensus

A method of decision-making where group members engage in discussions until a unanimous agreement is reached or a general consensus is formed.