Smith Industries Is Considering Replacing a Machine That Is Presently

question 10

Multiple Choice

Smith Industries is considering replacing a machine that is presently used in its production process. Which of the following is irrelevant to the replacement decision?
$$\begin{array} { | l | r | r | } \hline & \text { Old Machine } & \begin{array} { l } \text { Replacement } \\\text { Machine }\end{array} \\\hline \text { Original cost } & \$ 70,000 & \$ 45,000 \\\hline \text { Remaining useful life in years } & 5 & 5 \\\hline \text { Current age in years } & 5 & 0\\\hline \text { Book value } & \$ 33,000 & \\\hline\text { Current disposal value in cash }&\$10,000\\\hline \text { Furrent disposal value in cash } & \$ 0 & \$ 0 \\\hline \text { Annual cash operating costs } & \$ 7,000 & \$ 4,000 \\\hline\end{array}$$ Which of the information provided in the table is irrelevant to the replacement decision?

• A)the sales price of the new machine
• B)the original cost of the old machine
• C)the current disposal value of the old machine
• D)the annual cash operating costs

---

Definitions:

Ethics

Ethics involves the systematizing, defending, and recommending concepts of right and wrong behavior, often guided by moral principles.

Bystander Effect

The phenomenon where individuals are less likely to offer help to a victim when other people are present.

Diffusion Of Responsibility

Occurs when a person fails to take responsibility for actions or for inaction because of the presence of other people who are seen to share the responsibility.

Altruism

Altruism is the principle or practice of concern for the welfare of others, often manifesting in selfless acts.