Gurnee Company Is Considering the Replacement of a Machine That

question 69

Multiple Choice

Gurnee 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,what is the difference in total relevant costs between the old and new machines?

• A) $12,000
• B) $30,000
• C) $98,000
• D) $130,000

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