If a new asset is being considered as a replacement for an old asset, the relevant cash flows would be found by adding together the expected cash flows still remaining on the old asset to the expected cash flows for new asset.

Question

Quizplus · Accepted Answer

The relevant cash flows are the incremental cash flows, which are the differences between the cash flows of the new asset and the old asset, not the sum of both.

If a New Asset Is Being Considered as a Replacement