An old machine that originally cost $9,500 thus far has accumulated depreciation of $1,900 . The remaining useful life is four years, with no salvage value at the end of its useful life. A new machine is now available that costs $8,500, with a useful life of five years and no residual value. The old machine could be sold now for $5,900 . The annual cash operating costs for the old machine are

$5,000, but for the new machine they would be only $2,500 . Gross revenue from the products would be $12,000 annually for either machine. The company should
a. keep the old machine to avoid a $5,900 loss on its disposal.
b. keep the old machine to avoid a $1,700 loss on its disposal.
c. replace the old machine.
d. keep the old machine to avoid an $8,500 decrease in cash.


C

Business

You might also like to view...

What conveys authority for the manufacture of a specified product or subassembly in a specified quantity and describe the material, labor, and machine requirements for the job?

a. capacity requirements planning (CRP) b. manufacturing orders (MO) c. capable to promise planning (CTP) d. computer-aided process planning (CAPP)

Business

________ holds that there are few really new ideas and that "true is better" than new.

A. Scientific management B. The quality-management viewpoint C. Evidence-based management D. Behavioral management E. MBO

Business

When information on actual project results is gathered and compared to actual results, the process is referred to as a(n) ______________________________________

Fill in the blank(s) with correct word

Business

Investors Al and Bea lend $100,000 to each new idea. Al's history is that he selects low-risk projects or ideas that hit 80% of the time. Bea's history is that she takes on high-risk projects that hit 40% of the time

What rate of return must each successful project pay Al and Bea for them to break even? A) Al's rate is 150%, and Bea's rate is 25%. B) Al's rate is 40%, and Bea's rate is 40%. C) Al's rate is 25%, and Bea's rate is 150%. D) Al's rate is 30%, and Bea's rate is 150%.

Business