Your firm is considering replacing an existing machine with a newer model. Which of the following need not be considered when determining the incremental cash flows of the
Proposed project?
A)labor costs associated with the existing machine
B)selling price of the existing machine
C)cost of the new machine
D)All of the above costs need to be considered in determining the incremental cash flows of the new model.

Question

Quizplus · Accepted Answer

All of the costs listed (labor costs associated with the existing machine, selling price of the existing machine, and cost of the new machine) need to be considered when determining the incremental cash flows of the new model. This is because these costs can all have an impact on the cash flows and profitability of the project. Therefore, none of them can be ignored.

Your Firm Is Considering Replacing an Existing Machine with a Newer