Sunbury Company Is Considering the Replacement of a Machine That

question 17

Multiple Choice

Sunbury Company is considering the replacement of a machine that is presently used in production.The following data are available:
$\begin{array}{lll}&\text { Old Machine }&\text { NEW Machine }\\\text { Original cost } & \$ 60,000 & \$ 35,000 \\\text { Useful life in years } & 10 & 5 \\\text { Current age in years } & 5 & 0 \\\text { Book value } & \$ 25,000 & -\\\text { Disposal value now } & \$ 8,000 & - \\\text { Disposal value in } 5 \text { years } & 0 & 0 \\\text { Annual cash operating costs } & \$ 12,000 & \$ 4,000\end{array}$
Adding all five years together,the total relevant costs to consider if the old machine is kept are ________.

• A) $30,000
• B) $50,000
• C) $52,000
• D) $60,000

---

Definitions:

Random Sample

A subset of individuals chosen from a larger set, where each individual has an equal chance of being selected.

Confidence Interval

A range of values derived from sample data that is likely to contain the value of an unknown population parameter, with a certain level of confidence.

Retained Students

Students who have not progressed to the next academic grade or level as expected, often due to academic or other challenges.

Significance Level

A threshold for determining the probability of rejecting the null hypothesis in a statistical test, typically set before the data is collected.