Asset Replacement An uninsured boat costing $98,000 was wrecked the first day it was used. It can be either sold as-is for $9,800 cash and replaced with a similar boat costing $100,000 or rebuilt for $83,000 and be brand new as far as operating characteristics and looks are concerned.   Required: What is the difference in cost between the two options?           Based on financial considerations, what should the company do?     multiple choice Sell as-is for $9,800 cash and replace with a similar boat costing $100,000. Rebuild for $83,000.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Asset Replacement An uninsured boat costing $98,000 was wrecked the first day it was used. It can be either sold as-is for $9,800 cash and replaced with a similar boat costing $100,000 or rebuilt for $83,000 and be brand new as far as operating characteristics and looks are concerned.

 

Required:

What is the difference in cost between the two options?

 

 

 

 

 

Based on financial considerations, what should the company do?

 

 

multiple choice

  • Sell as-is for $9,800 cash and replace with a similar boat costing $100,000.
  • Rebuild for $83,000.

 

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