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Answer the Following Questions Using the Information Below:
Flowers for Everyone

Question 195

Multiple Choice

Answer the following questions using the information below:
Flowers For Everyone is considering replacing its existing delivery van with a new one.The new van can offer considerable savings in operating costs.Information about the existing van and the new van follow:
 Existing van  New van  Original cost $100000$180000 Antual operating cost $33000$20000 Accumulated depreciation $60000 Current salvage value of the existing van $45000 Remaining life 10 years 10 years  Salvage value in 10 years $0$0 Antual depreciation $4000$18000\begin{array} { l r r } & \text { Existing van } & \text { New van } \\\text { Original cost } & \$ 100000 & \$ 180000 \\\text { Antual operating cost } & \$ 33000 & \$ 20000 \\\text { Accumulated depreciation } & \$ 60000 & - \\\text { Current salvage value of the existing van } & \$ 45000 & - \\\text { Remaining life } & 10 \text { years } & 10 \text { years } \\\text { Salvage value in 10 years } & \$ 0 & \$ 0 \\\text { Antual depreciation } & \$ 4000 & \$ 18000\end{array}
-'Relevant costs' for this decision include:


A) the current salvage value.
B) accumulated depreciation.
C) the salvage value in 10 years.
D) the original cost of the existing van.

Correct Answer:

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