Ernie Company is considering replacing a machine that is currently used in the production process.The ________ is irrelevant to the replacement decision.
A) cost of the new machine
B) disposal value of old machine
C) book value of old machine
D) annual operating cost of old machine (2 years left)

Question

Quizplus · Accepted Answer

The book value of the old machine is irrelevant because it relates to the historical cost of the machine and not to its current usefulness or replacement value. The cost of the new machine, disposal value of the old machine, and annual operating cost of the old machine are all important factors to consider in the replacement decision.

Ernie Company Is Considering Replacing a Machine That Is Currently