Answer the Following Questions Using the Information Below

question 155

Multiple Choice

Answer the following questions using the information below:
Victoria, Inc., is considering replacing a machine. The following data are available:

-For the decision to keep the old machine, the relevant costs of keeping the old machine total:

• A)$120,000
• B)$70,000
• C)$94,000
• D)$144,000

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Definitions:

Investment in Bonds

Purchasing debt securities issued by corporations or governments to earn interest income and potentially benefit from bond price appreciations.

Available-for-Sale Securities

Financial assets that are neither classified as held-for-trading nor held-to-maturity, and whose value is subject to change; gains and losses are typically reported in other comprehensive income.

Fair Market Value

The price at which an asset would change hands between a willing buyer and a willing seller, both having reasonable knowledge of all relevant facts and neither being under compulsion to buy or sell.

Unrealized Increase

The increase in value of an asset that has not yet been sold or cashed in, thus not yet resulting in actual income.