Concord Corporation is considering the replacement of a piece of equipment with a newer model. The following data has been collected: Old Equipment New Equipment Purchase price $275000 $448000 Accumulated depreciation 110000 - 0 - Annual operating costs 361000 283000 If the old equipment is replaced now, it can be sold for $74200. Both the old equipment’s remaining useful life and the new equipment’s useful life is 5 years. Which of the following amounts is irrelevant to the replacement decision?
Concord Corporation is considering the replacement of a piece of equipment with a newer model. The following data has been collected: Old Equipment New Equipment Purchase price $275000 $448000 Accumulated depreciation 110000 - 0 - Annual operating costs 361000 283000 If the old equipment is replaced now, it can be sold for $74200. Both the old equipment’s remaining useful life and the new equipment’s useful life is 5 years. Which of the following amounts is irrelevant to the replacement decision?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concord Corporation is considering the replacement of a piece of equipment with a newer model. The following data has been collected:
| Old Equipment | New Equipment | ||
| Purchase price | $275000 | $448000 | |
| 110000 | - 0 - | ||
| Annual operating costs | 361000 | 283000 |
If the old equipment is replaced now, it can be sold for $74200. Both the old equipment’s remaining useful life and the new equipment’s useful life is 5 years.
Which of the following amounts is irrelevant to the replacement decision?
|
|
$165000 |
|
|
$373800 |
|
|
$74200 |
|
|
$448000 |
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