The terminal disposal price of a replacement machine
A)generally increases cash inflow in the year of disposal.
B)is the total of the salvage values of the old machine and the new machine.
C)is the salvage value of the old machine.
D)is the NPV value of the new machine salvage value.
E)is the NPV of the salvage value of the old machine.

Question

Quizplus · Accepted Answer

The terminal disposal price of a replacement machine generally increases cash inflow in the year of disposal because it represents the cash received from selling the old machine.

The Terminal Disposal Price of a Replacement Machine