Margo IncWants to Replace a 9-Year-Old Machine with a New Machine

question 50

Multiple Choice

Margo Inc.wants to replace a 9-year-old machine with a new machine that is more efficient.The old machine cost $70,000 when new and has a current book value of $15,000.Margo can sell the machine to a foreign buyer for $14,000.Margo's tax rate is 35%.The effect of the sale of the old machine on the initial outlay for the new machine is

• A) ($14,350).
• B) ($13,650).
• C) ($9,100).
• D) $1,000

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Definitions:

Similar Goods

Products or services that fulfill similar needs or desires among consumers, often considered interchangeable or substitutes for one another.

Power

The ability or capacity to influence or control the behavior of others or the course of events.

Sociological

Pertaining to sociology, which is the study of the development, structure, and functioning of human society.

Structural

Pertains to the arrangement or organization of parts that comprise a complex system, particularly in relation to sociology and the understanding of social organizations.