Tony Company Is Considering Replacing a Machine That Is Presently

question 55

Multiple Choice

Tony Company is considering replacing a machine that is presently used in the production of its product. The following data are available: $\begin{array}{lll}&& \text { Replacement } \\&\text { Old Machine } & \text { Machine }\\\text { Original cost } & \$ 295,000 & \$ 188,000 \\\text { Useful lif e in years } & 11 & 5 \\\text { Current age in years } & 6 & 0 \\\text { Book value } & \$ 130,000 & - \\\text { Disposal value now } & \$ 52,000 & - \\\text { Disposal value in 5 years } & 0 & 0 \\\text { Annual cash op erating } & \$ 39,000 & \$ 24,000\\\text {costs}\end{array}$ is irrelevant.

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

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Definitions:

English Exam

A test assessing one's knowledge, proficiency, and understanding of the English language.

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An analytic gauge for the degree of spread or divergence of values within a dataset.

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