Replace the old machine with a new machine if:

Question

Quizplus · Accepted Answer

The decision to replace an old machine with a new machine should be based on the comparison of their cash flows. If the cash flows of the new machine are greater than the old machine, it would be an economically sound decision as the business will benefit from increased revenues and reduced costs. Therefore, choice B is the best option. The other options, A and C, are incorrect because they do not consider the importance of cash flows and NPV in decision making.

Replace the Old Machine with a New Machine If