The county administrator is trying to decide whether to replace the old equipment. Because of rapid changes in technology, she expects the replacement equipment to have only a 3-year useful life. Ignore the effects of taxes.

1)Prepare a schedule that compares both relevant and irrelevant items for the next 3 years?

2)Prepare a schedule that compares all relevant items for the next 3 years. Which tabulation is clearer, this one or the one in requirement 1?

3)Prepare a simple shortcut or direct analysis to support your choice of alternatives?

-The Douglas County's photocopying requirements data:

The Douglas County%u2019s photocopying requirements data:		Proposed Replacement Equipment
	Old Equipment
Useful life in years					5		3
Current age in years	2		0
Useful life remaining in years	3		3
Original cost	$25,000		$15,000
Accumulated depreciation	10,000		0
Book value	15,000		Not acquired yet
Disposal value (in cash) now	6,000		Not acquired yet
Disposal value in 3 years	0		0
Annual cash operating costs for power;	14,000		9,000
maintenance, toner, and supplies

Answer rating: 100% (QA)

1 Relevant and irrelevant items including ... View the full answer