Overland Company is considering replacing a machine that is presently used in the production of its product. The following data are available:
-Which of the data provided in the table is irrelevant?
A) The annual operating cost of the old machine
B) The original cost of the replacement machine
C) The disposal value of the old machine
D) The book value of the old machine

Question

Overland Company is considering replacing a machine that is presently used in the production of its product. The following data are available: 
-Which of the data provided in the table is irrelevant?
A) The annual operating cost of the old machine 
B) The original cost of the replacement machine 
C) The disposal value of the old machine 
D) The book value of the old machine

Quizplus · Accepted Answer

The book value of the old machine is irrelevant because it does not impact the decision to replace the machine. The decision should be based on the costs and benefits of the new machine compared to the costs and benefits of keeping the old machine. The book value is simply an accounting term and does not provide any useful information for this decision.

Overland Company Is Considering Replacing a Machine That Is Presently