Park Ridge Company Is Considering the Replacement of a Machine

question 37

Multiple Choice

Park Ridge Company is considering the replacement of a machine that is presently used in production.The following data are available:
$$\begin{array} { l l l l } \text { Original cost } & \$ 200,000 & \$ 160,000 \\\text { Wseful life in years } & 10 & 5 & \\\text { Current age in years } & 5 & 0 & \\\text { Fook value } & \$ 100,000 & - \\\text { Disposal value now } & \$ 32,000 & 0 & \\\text { Disposal value in } 5 \text { years } & 0 & \$ 14,000\end{array}$$
Adding all five years together,the total relevant costs to consider if the old machine is kept is ________.

• A) $32,000
• B) $68,000
• C) $80,000
• D) $100,000

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Definitions:

Depreciation Expense

An accounting method allocating the cost of a tangible asset over its useful life, reflecting the decrease in value of the asset over time due to wear and tear, usage, or obsolescence.

Translated

Converted from one language to another or, in financial terms, adjusted from one currency into another using the current exchange rate.