A company is considering replacing old equipment with new equipment. Which of the following is a relevant cost for incremental analysis?

Annual depreciation charge on the old equipment

Estimated annual depreciation of the new equipment

Book value of the old equipment

Cost of the new equipment

Begley, Inc. is contemplating the replacement of an old machine with a new one. The following information has been gathered:

	Old Machine	New Machine
Price	$250,000	$500,000
Accumulated Depreciation	75,000	-0-
Remaining useful life	10 years	-0-
Useful life	-0-	10 years
Annual operating costs	$200,000	$150,500

If the old machine is replaced, it can be sold for $20,000.

The net advantage (disadvantage) of replacing the old machine is

$20,000

$(50,000)

$(5,000)

$15,000

A segment has the following data:

Sales	$700,000
Variable expenses	300,000
Fixed expenses	550,000

What will be the incremental effect on net income if this segment is eliminated, assuming the fixed expenses will be allocated to profitable segments?

Cannot be determined from the data provided.

$400,000 increase

$400,000 decrease

$550,000 decreas