[Solved] Lucena Corporation Purchased a Machine 7 Years Ago for $339,000

Question 83
Multiple Choice

Lucena Corporation purchased a machine 7 years ago for $339,000 when it launched product X05K.Unfortunately,this machine has broken down and cannot be repaired.The machine could be replaced by a new model 360 machine costing $353,000 or by a new model 280 machine costing $332,000.Management has decided to buy the model 280 machine.It has less capacity than the model 360 machine,but its capacity is sufficient to continue making product X05K.Management also considered,but rejected,the alternative of dropping product X05K and not replacing the old machine.If that were done,the $332,000 invested in the new machine could instead have been invested in a project that would have returned a total of $426,000.In making the decision to buy the model 280 machine rather than the model 360 machine,the differential cost was:

A)$21,000.
B)$87,000.
C)$7,000.
D)$14,000.

10+ million students use Quizplus to study and prepare for their homework, quizzes and exams through 20m+ questions in 300k quizzes.

Business

Explore our library and get Accounting Homework Help with various study sets and a huge amount of quizzes and questions

3.5K

Study sets

66.5K

Quizzes

5.9M

Questions

Upload material to get free access

Upload Now Upload Now
Upload Now

Invite a friend and get free access

Upload NowInvite a friend
Invite a friend

Subscribe and get an instant access

See our plansSee our plans
See our plans