Samantha Company Is Considering Replacing a Machine That Is Presently

question 64

Multiple Choice

Samantha Company is considering replacing a machine that is presently used in the production of its product. The following data are available: $\begin{array}{lll}& \text { Old Machine } & \begin{array} { l } \text { R eplacem } \\\text { M achine }\end{array} \\\text { Original cost } & \$ 67,000 & \$ 54,000 \\\text { Useful life in years } & 13 & 4 \\\text { Current age in years } & 9 & 0 \\\text { Book value } & \$ 32,000 & - \\\text { Disposal value now } & \$ 18,000 & - \\\text { Disposal value in 5 years } & 0 & 0 \\\text { Annual cash operating } & \$ 9,000 & \$ 7,000\\\text { costs}\end{array}$ is irrelevant.

• A) The disposal value of the old machine
• B) The annual operating cost of the old machine
• C) The disposal value in five years
• D) The original cost of the replacement machine

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Definitions:

Wearable Computer

A miniature computer worn by a person allowing the users to multitask.

Multitask

The ability of an individual or machine to perform multiple tasks simultaneously.

Secondary Storage

Non-volatile storage media used to store data permanently, such as hard drives, SSDs, or magnetic tape.

Magnetic Tape

A secondary storage medium on a large open reel or in a smaller cartridge or cassette.