When considering the replacement of old equipment,which of the following item is relevant?
A) loss on disposal of old equipment
B) book value of old equipment
C) accumulated depreciation on old equipment
D) future maintenance costs of old equipment

Question

Quizplus · Accepted Answer

When considering the replacement of old equipment, it is important to consider the future maintenance costs of old equipment. This would give an idea of how much money would be required to maintain the old equipment in working condition. This information would then help in making a decision about whether it would be more cost-effective to replace the old equipment with new equipment or to continue with the old equipment. Loss on disposal of old equipment, book value of old equipment and accumulated depreciation on old equipment are all relevant, but not as important as future maintenance costs.

When Considering the Replacement of Old Equipment,which of the Following