Smith Industries Is Considering Replacing a Machine That Is Presently

question 144

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?
$$\begin{array} { | l | r | r | } \hline & \text { Old Machine } & \begin{array} { c } \text { Replacement } \\\text { Machine }\end{array} \\\hline \text { Original cost } & \$ 55,000 & \$ 46,000 \\\hline \text { Remaining useful life in years } & 5 & 5 \\\hline \text { Current age in years } & 5 &0 \\\hline \text { Book value } & \$ 33,000 & \\\hline \text { Current disposal value in cash } & \$ 9,000 & \\\hline \text { Future disposal value in cash (in 5 years) } &\$0&\$0 \\\hline \text { Annual cash operating costs } & \$ 8,000 & \$ 4,000 \\\hline\end{array}$$ 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

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Definitions:

Purity

The state or quality of being clean, free from contaminants, or morally untarnished.

Variation in Contrast

Differences in the degree of distinction between two or more elements, often used in visual and language analysis.

Variation in Brightness

Differences in the lightness or luminance perceived in visual stimuli, which can affect contrast and visibility.

Variation in Hue

Differences in color perception, which can be attributed to changes in wavelength, saturation, and lightness.