Nighthawk Inc

question 49

Multiple Choice

Nighthawk Inc.is considering disposing of an old machine with a book value of $22,500 and an estimated remaining life of three years.The old machine can be sold for $6,250.A new machine with a purchase price of $68,750 is being considered a replacement.It will have a useful life of three years and no residual value.It is estimated that the annual variable manufacturing costs will be reduced from $43,750 to $20,000 if the new machine is purchased.The differential effect on income for the entire three years for the new machine is

• A) $8,750 increase
• B) $31,250 decrease
• C) $8,750 decrease
• D) $2,925 decrease

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Definitions:

Agnostic

A person who believes that nothing is known or can be known of the existence or nature of God or of anything beyond material phenomena.

No Religious Affiliation

Describes individuals who do not identify with any particular religion or belief system.

Canadians

People originating from or having citizenship in Canada, a country known for its multicultural population and bilingual French-English heritage.

Percentage

A fraction or ratio with 100 understood as the denominator; used in calculating rates, proportions, and shares.