Inverness Company is considering the replacement of a machine that is presently used in production. The following data are available:
Old Machine New Machine
Original cost $57,000 $35,000
Useful life in years 17 5
Current age in years 12 0
Book value $39,000 -
Disposal value now $8,000 -
Disposal value in 5 years 0 0
Annual cash operating costs $7,000 $4,000
Adding all five years together, what is the difference in total relevant costs between the old machine and the new machine?
A) $12,000
B) $15,000
C) $22,000
D) $37,000
A
You might also like to view...
A group of states that have reduced or eliminated trade barriers among themselves but maintain their individual tariffs in dealing with other states is called ________
A. a customs union B. a free trade area C. the United Nations System D. an economic consultative association
Categories of project manager characteristics include each of the following except
A) personal. B) technical. C) relational. D) professional.