Managers Are Examining a Possible Replacement of a Machine Decision

question 177

Multiple Choice

Managers are examining a possible replacement of a machine decision and generate the following numbers:
Book value of old machine $1,00,000
Current disposal value of old machine $50,000
Loss on disposal of old machine $300,000
Cost of new machine $600,000
In performing an analysis and in attempt to answer the question, "should we replace the old machine", which of the following statements would be true

• A) the book value of the old machine is relevant
• B) the book value of the old machine and the current disposal value of the old machine are both relevant
• C) the cost of the new machine and the current disposal value of the old machine are relevant
• D) the book value of the old machine and the current disposal value of the old machine are the only relevant items

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Definitions:

Leader Interaction

The communication and relational dynamics between a leader and their team members or followers.

Subordinate

A subordinate is an individual who works under the direction of someone else, typically answering to a manager or supervisor in the organizational hierarchy.

Intra-Individual Level

Pertaining to processes or variations occurring within a single individual, as opposed to between individuals or in a group.

Competitive Strategy

refers to a business plan crafted to gain an advantage over rivals in the market, often through differentiating products, services, or operational effectiveness.