Use the following information for questions
Chung Inc. is considering the replacement of a piece of equipment with a newer model. The following data has been collected: $\begin{array}{lrr}&\text { Old Equipment}&\text { New Equipment }\
\text { Purchase price } & \$ 225,000 & \$ 375,000 \
\text { Accumulated depreciation } & 90,000 & -0- \
\text { Annual operating costs } & 300,000 & 240,000
\end{array}$ If the old equipment is replaced now, it can be sold for $60,000. Both the old equipment's remaining useful life and the new equipment's useful life is 5 years.
-What is the net cost of the new equipment?
A) $375,000
B) $315,000
C) $150,000
D) $75,000

Question

Use the following information for questions 
Chung Inc. is considering the replacement of a piece of equipment with a newer model. The following data has been collected: $\begin{array}{lrr}&\text { Old Equipment}&\text { New Equipment }\
\text { Purchase price } & \$ 225,000 & \$ 375,000 \
\text { Accumulated depreciation } & 90,000 & -0- \
\text { Annual operating costs } & 300,000 & 240,000
\end{array}$ If the old equipment is replaced now, it can be sold for $60,000. Both the old equipment's remaining useful life and the new equipment's useful life is 5 years.
-What is the net cost of the new equipment?
A) $375,000
B) $315,000
C) $150,000
D) $75,000

Quizplus · Accepted Answer

The net cost of the new equipment is calculated by taking the purchase price of the new equipment ($375,000) and subtracting the sale price of the old equipment ($60,000), resulting in $315,000.

Use the Following Information for Questions Chung Inc If the Old Equipment Is Replaced Now, It Can Be

Use the Following Information for Questions
Chung Inc If the Old Equipment Is Replaced Now, It Can Be