Cocoa Beach Company Is Considering Replacing a Machine That Is

question 134

Multiple Choice

Cocoa Beach Company is considering replacing a machine that is presently used in the production of its product. The following data are available: $\begin{array}{lll}&& \text { Replacement } \\&\text { Old Machine } & \text { M achine }\\\text { Original cost } & \$ 333,000 & \$ 222,000 \\\text { Useful life in years } & 10 & 5 \\\text { Current age in years } & 5 & 0 \\\text { Book value } & \$ 100,000 & - \\\text { Disposal value now } & \$ 32,000 & - \\\text { Disposal value in 5 years } & 0 & 0 \\\text { Annual cash operating } & \$ 20,000 & \$ 14,000\ \\text { costs} \\\end{array}$ Ignoring income taxes, the difference in cost between the old and new machine is:

• A) $98,000 in favor of the old machine
• B) $40,000 in favor of the new machine
• C) $12,000 in favor of the new machine
• D) $98,000 in favor of the new machine

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Definitions:

Supertasters

Individuals who have a heightened sense of taste, particularly for bitter flavors, likely due to a higher density of taste papillae.

Sweet Tastes

The gustatory perception elicited by sugars and substances that mimic the chemistry of sugars, resulting in a pleasant flavor.

Bitter Tastes

One of the basic tastes, detected by the tongue and often associated with compounds that are considered potentially toxic or harmful.

Pictorial Depth Cues

Visual indicators that can imply depth in a drawing, painting, or photograph.