Six years ago, China Exporters paid cash for a new packaging machine that cost $347,000.Three years ago, the firm spent $14,300 on repairs and modifications to the machine.The machine is now fully depreciated and has just sat idly in a back corner of the shop for the past seven months.The estimated value of the machine today is $157,500.The firm is considering using this machine in a new project.If it does so, what value should be assigned to this machine and included in the initial costs of the new project?

Question

Quizplus · Accepted Answer

The value to be assigned to the machine for the new project is its current estimated market value, which is $157,500. This is the opportunity cost of using the machine in the project.

Six Years Ago, China Exporters Paid Cash for a New