Which cost is relevant to an equipment replacement decision?
A)cost of old equipment
B)cost of new equipment
C)book value of old equipment
D)depreciation expense on old equipment

Question

Quizplus · Accepted Answer

The cost of new equipment is relevant to the equipment replacement decision as it is necessary to consider the cost of a new equipment in comparison to repairing the old one or keeping it in use. The other options are not relevant as the cost of old equipment, book value, and depreciation expenses do not reflect the cost or benefits of replacing the equipment.

Which Cost Is Relevant to an Equipment Replacement Decision