In the Short Run,asset Replacement Decisions Often Result in Lower

question 101

Multiple Choice

In the short run,asset replacement decisions often result in lower reported profits in the period of replacement.Which of the following does not contribute to this?

• A) The new asset must be paid for in the period of replacement.
• B) The cost savings or increase in revenues generated by the new asset may not start immediately, and/or often, a loss on disposal of the existing asset must be reported in the period of replacement.
• C) Often, a loss on disposal of the existing asset must be reported in the period of replacement.
• D) The cost savings or increase in revenues generated by the new asset may not start immediately.