Buckner 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 original cost of the replacement machine
B) The disposal value of the old machine
C) The book value of the old machine
D) The annual operating cost of the old machine

Question

Buckner 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 original cost of the replacement machine 
B) The disposal value of the old machine 
C) The book value of the old machine 
D) The annual operating cost of the old machine

Quizplus · Accepted Answer

The book value of the old machine is irrelevant when considering replacement decisions, as it is a sunk cost and does not affect future cash flows or decision-making.

Buckner Company Is Considering Replacing a Machine That Is Presently