Jeannie Company Is Considering Replacing a Machine That Is Presently

question 42

Multiple Choice

Jeannie Company is considering replacing a machine that is presently used in the production of its product. The following data are available: $\begin{array}{lll}&& \text { Replacement } \\&\text { Old Machine } & \text { Machine }\\\text { Original cost } & \$ 333,000 & \$ 222,000 \\\text { Useful life in years } & 6 & 5 \\\text { Current age in years } & 1 & 0 \\\text { Book value } & \$ 198,000 & - \\\text { Disposal value now } & \$ 132,000 & - \\\text { Disposal value in 5 years } & 0 & 0 \\\text { Annual cash operating } & \$ 45,000 & \$ 34,000\\\text {costs}\end{array}$ is a sunk cost.

• A) The annual cash operating costs of the old machine
• B) The original cost of the old machine
• C) The disposal value of the old machine
• D) The annual cash operating costs of the replacement machine

---

Definitions:

Repatriation

The process of returning an individual to their country of origin or citizenship, often used in the context of employees returning from international assignments.

Cross-Cultural Preparation

Training to prepare employees and their family members for an assignment in a foreign country.

Culture Shock

The sense of confusion, uncertainty, or anxiety experienced by someone exposed to an unfamiliar culture or way of life.

Compensation

Payment or rewards given to employees in exchange for their services or labor.