Bradley Industries is considering replacing a machine that is presently used in its production process. Which of the following is irrelevant to the replacement decision?
$\begin{array}{|l|r|r|}
\hline& \text { Old Machine } & \begin{array}{c}
\text { Replacement } \
\text { Machine }
\end{array} \
\hline \text { Original cost } & \$ 60,000 & \$ 45,000\\hline \text { Remaining useful life in years } & 5 & 5 \
\hline \text { Current age in years } & 5 & 0 \
\hline \text { Book value } & \$ 30,000 & \\hline \text { Current disposal value in cash } & \$ 9000 & \
\hline \text { Future disposal value in cash (in 5 years) } & \$ 0 & \$ 0 \
\hline \text { Annual cash operating costs } & \$ 7000 & \$ 4500\
\hline
\end{array}$ Which of the information provided in the table is irrelevant to the replacement decision?

Question

Bradley Industries is considering replacing a machine that is presently used in its production process. Which of the following is irrelevant to the replacement decision?
$\begin{array}{|l|r|r|} 
\hline& \text { Old Machine } & \begin{array}{c}
\text { Replacement } \
\text { Machine }
\end{array} \
\hline \text { Original cost } & \$ 60,000 & \$ 45,000\\hline \text { Remaining useful life in years } & 5 & 5 \
\hline \text { Current age in years } & 5 & 0 \
\hline \text { Book value } & \$ 30,000 & \\hline \text { Current disposal value in cash } & \$ 9000 & \
\hline \text { Future disposal value in cash (in 5 years) } & \$ 0 & \$ 0 \
\hline \text { Annual cash operating costs } & \$ 7000 & \$ 4500\
\hline
\end{array}$ Which of the information provided in the table is irrelevant to the replacement decision?

Quizplus · Accepted Answer

The original cost of the old machine is a sunk cost, meaning it has already been incurred and cannot be recovered or changed by the decision to replace the machine. Therefore, it is irrelevant to the replacement decision.

Bradley Industries Is Considering Replacing a Machine That Is Presently