ABC Company has a machine with a 7 year useful life with an expected $6,000 salvage...

 

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ABC Company has a machine with a 7 year useful life with an expected $6,000 salvage value. It paid $160,000 for the machine on January 2, 2009. On January 2, 2012, ABC found a technologically advanced machine that cost $80,000. The machine has a 4-year useful life and $12,000 salvage value. It will save $10,000 a year in operating expenses. The current machine can be sold for $40,000. The issue faced by ABC Company is whether to acquire the new machine or continue to use the original machine. Which of the following is a relevant factors to be included in the decision? A) The original cost of the machine was $160,000. OB) The old machine has a salvage value of $6,000 and the new machine has a salvage value of $12,000. OC) The old machine has depreciation expense of $22,000 and the new machine would have depreciation expense of $17,000. D) The old machine has only been used for 3 years and has a lot of productivity left. ABC Company has a machine with a 7 year useful life with an expected $6,000 salvage value. It paid $160,000 for the machine on January 2, 2009. On January 2, 2012, ABC found a technologically advanced machine that cost $80,000. The machine has a 4-year useful life and $12,000 salvage value. It will save $10,000 a year in operating expenses. The current machine can be sold for $40,000. The issue faced by ABC Company is whether to acquire the new machine or continue to use the original machine. Which of the following is a relevant factors to be included in the decision? A) The original cost of the machine was $160,000. OB) The old machine has a salvage value of $6,000 and the new machine has a salvage value of $12,000. OC) The old machine has depreciation expense of $22,000 and the new machine would have depreciation expense of $17,000. D) The old machine has only been used for 3 years and has a lot of productivity left.

Answer rating: 100% (QA)

the following is the relevant factor to be included in the decision d the old machine ha... View the full answer