BEE Company Is Considering the Replacement of a Machine That

question 90

Multiple Choice

BEE Company is considering the replacement of a machine that is presently used in production.Which of the following items are irrelevant to the replacement decision?

• A)annual operating cost of the old machine
• B)original cost of the new machine
• C)disposal value of the old machine at time of replacement
• D)original cost of old machine

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Definitions:

Decision-making Processes

The steps involved in choosing among alternatives to address a problem or capitalize on an opportunity.

Capitalism

An economic system characterized by private or corporate ownership of capital goods, investments dictated by private decision, and prices, production, and the distribution of goods determined mainly by competition in a free market.

Marginal Cost

The cost of producing one additional unit of a good or service, which can change depending on the level of production.

Costume Party

A social gathering where participants wear costumes and often engage in themed activities, not a term typically associated with economics.