Use the Following Information for Questions
Chung Inc If the Old Equipment Is Replaced Now, It Can Be

question 143

Multiple Choice

Use the following information for questions
Chung Inc. is considering the replacement of a piece of equipment with a newer model. The following data has been collected: $\begin{array}{lrr}&\text { Old Equipment}&\text { New Equipment }\\\text { Purchase price } & \$ 225,000 & \$ 375,000 \\\text { Accumulated depreciation } & 90,000 & -0- \\\text { Annual operating costs } & 300,000 & 240,000\end{array}$ If the old equipment is replaced now, it can be sold for $60,000. Both the old equipment's remaining useful life and the new equipment's useful life is 5 years.
-Which of the following amounts is irrelevant to the replacement decision?

• A) $375,000
• B) $135,000
• C) $315,000
• D) $60,000

---

Definitions:

Hammer

A tool consisting of a weighted "head" fixed to a long handle that is swung to deliver an impact to a small area of an object.

Anvil

A heavy iron block used in metalworking as a surface upon which metals can be hammered and shaped.

Auditory Cortex

The part of the brain that processes auditory information, located in the temporal lobe.

Temporal Lobe

A region of the cerebral cortex responsible for processing auditory information and is involved in memory and emotion.