Lew's Metals has a machine sitting idle in its warehouse.The machine originally cost $213,000,has a current book value of $32,300,has a scrap metal value of $13,000,and a market value of $46,900.The machine is totally paid for.What value should be placed on this machine if it is used for a new project?
A) $0
B) $13,000
C) $32,300
D) $46,900

Question

Quizplus · Accepted Answer

The market value of $46,900 is the most relevant value to use for the machine if it is used for a new project, as it reflects the current value in the market. The original cost and book value are not as relevant since they are historical values and do not reflect the current market conditions. The scrap metal value is also not relevant if the machine is going to be used for a new project, as it assumes that the machine will be sold for parts.

Lew's Metals Has a Machine Sitting Idle in Its Warehouse