Which of the following is relevant when deciding to replace old equipment with new?
A)Depreciation accumulated on the old equipment.
B)The cost of the old equipment that the company is replacing.
C)Trade-in value of the old equipment.
D)Variable cost of utilities that will not change between the old and new equipment.

Question

Quizplus · Accepted Answer

The trade-in value of the old equipment can offset the cost of new equipment, making it a relevant factor in the decision-making process. Depreciation accumulated on the old equipment, the cost of the old equipment being replaced, and variable costs of utilities that will not change are not directly relevant to the decision to replace old equipment with new.

Which of the Following Is Relevant When Deciding to Replace