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Indicate whether the statement is true or false
True
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Breezy Company is considering the replacement of equipment that has a current book value of $340,000. Breezy has an opportunity to sell the equipment for $240,000. The cost of replacing the old equipment with a new machine is $300,000. The cost of operating the new equipment is $20,000 per year less than the cost of operating the old equipment. The new equipment has a 5-year useful life. The amount of the sunk cost for this replacement decision is
A. $240,000 B. $300,000 C. $100,000 D. $340,000
Revenue accounts are increased by credits
Indicate whether the statement is true or false
Susanna hires Shane, a lawyer, as an independent contractor to represent her in a civil lawsuit against a defendant to recover monetary damages
If Susanna authorizes Shane to settle the case within a certain dollar amount and Shane does so, which of the following would be true? A) The agreement is invalid after Shane's contract with Susanna terminates. B) The agreement is void because independent contractors cannot enter into contracts. C) The agreement is binding only when there is no financial settlement involved. D) The settlement agreement is binding for Susanna.
Answer the following statement(s) true (T) or false (F)
1. Opportunity costs incurred by having capital tied up in inventory are typically referred to as order costs. 2. Increasing the amount of inventory that is held decreases the risk of a stockout. 3. The EOQ model is widely viewed as being robust. 4. he optimal order quantity for the EOQ model is found where the annual ordering and carrying costs are equal. 5. In an EOQ model with variable demand, stockouts cannot occur.