Assume a firm has an ongoing need for a machine,and the current machine is operating efficiently.The firm should plan to replace this machine when it

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The best choice is D because replacing the current machine with a machine that has a lower equivalent annual cost will result in cost savings for the firm. The other options (A, B, C, and E) are not necessarily good indicators for when a machine should be replaced. Just because a machine reaches the end of its depreciable life or is fully paid for doesn't mean it can't continue to operate efficiently. Similarly, a machine's book value may not accurately reflect its actual value, and selling it for more than its current book value does not necessarily mean it needs to be replaced.

Assume a Firm Has an Ongoing Need for a Machine,and