Indicate whether each of the following statements is true or false.Depreciation expense on a building or equipment is an example of a sunk cost._____Addison Company is using a hole-punching machine that originally cost $80,000 and has a current market value of $45,000. The $45,000 is a measure of the opportunity cost for continuing to use the machine._____The purchase price of an old machine is relevant to the decision of whether or not to replace an old machine._____The estimated salvage value of new equipment is relevant to the decision to purchase the new equipment even though it will not happen until the end of the asset's useful life._____
What will be an ideal response?
| Depreciation expense on a building or equipment is an example of a sunk cost. | T |
| Addison Company is using a hole-punching machine that originally cost $80,000 and has a current market value of $45,000. The $45,000 is a measure of the opportunity cost for continuing to use the machine. | T |
| The purchase price of an old machine is relevant to the decision of whether or not to replace an old machine. | F |
| The estimated salvage value of new equipment is relevant to the decision to purchase the new equipment even though it will not happen until the end of the asset's useful life. | T |
You might also like to view...
The employee's earnings record is a summary of the earnings of all employees for each pay period
Indicate whether the statement is true or false
A company has an EBIT of $4 million, and its degree of total leverage is 2.4. The firm's debt consists of $20 million in bonds with a YTM of 11.60%. The company is considering a new production process that will require an increase in fixed costs but a decrease in variable costs. If adopted, the new process will result in a degree of operating leverage of 1.4. The president wants to keep the degree of total leverage at 2.4. If EBIT remains at $4 million, what dollar amount of bonds must be outstanding to accomplish this (assuming the yield to maturity remains at 11.60% and is equal to the coupon rate)? Donotroundintermediatecalculations.
A. $14,367,816 B. $16,091,954 C. $16,810,345 D. $16,666,667 E. $15,229,885
The "utilization factor" is defined as the
A) percent of time the system is idle. B) average percent of time the customers wait in line. C) average time the service system is open. D) percent of time that a single customer is in the system. E) None of the above
Who is covered under the Fair Debt Collections Practices Act?
a. an attorney collecting a debt for himself b. Macy's collecting a debt through its own collection subsidiary c. a hospital collecting a debt from a patient d. None of the above is covered under the FDCPA.