Berkman Company Is Considering the Purchase of New Equipment to Replace

question 96

Multiple Choice

Berkman Company is considering the purchase of new equipment to replace one-year-old equipment that is not achieving the expected results.The following information is available: Which of these items is NOT relevant to this decision?
$$\begin{array} { l l } \text { Expected maintenance costs of new machine } & \$ 13,000 \text { per year } \\\text { Purchase price of existing machine } & \$ 160,000 \\\text { Expected cost savings of new machine } & \$ 30,000 \text { per year } \\\text { Expected maintenance costs of exi sting machine } & \$ 8,000 \text { per year } \\\text { Resale value of existing machine } & \$ 45,000\end{array}$$

• A)the expected maintenance costs of the new machine
• B)the purchase cost of the existing machine
• C)the expected maintenance costs of the existing machine
• D)the expected resale value of the existing machine

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