What role does a trade-in allowance on old equipment play in a decision to retain or replace equipment?

Question

Quizplus · Accepted Answer

A trade-in allowance on old equipment is relevant to the decision to retain or replace equipment since it reduces the cost of the new equipment. This can influence the decision to replace old equipment that might otherwise be kept, as the perceived cost of the new equipment may be lower due to the trade-in allowance.

What Role Does a Trade-In Allowance on Old Equipment Play