Hartley's Meat Pies is considering replacing its existing delivery van with a new savings in operating costs. Information about the existing van and the new van follow: Original cost Annual operating cost Accumulated depreciation Current salvage value of the existing van Remaining life Salvage value in 8 years Annual depreciation Relevant costs for this decision include A. the annual operating cost B. the original cost of the existing van OC. accumulated depreciation OD. the book value of the existing van Existing van $59,000 $21,500 $35,000 $23,500 8 years $0 $3,000 New van $94,000 $14,000 8 years $0 $11,750
Hartley's Meat Pies is considering replacing its existing delivery van with a new savings in operating costs. Information about the existing van and the new van follow: Original cost Annual operating cost Accumulated depreciation Current salvage value of the existing van Remaining life Salvage value in 8 years Annual depreciation Relevant costs for this decision include A. the annual operating cost B. the original cost of the existing van OC. accumulated depreciation OD. the book value of the existing van Existing van $59,000 $21,500 $35,000 $23,500 8 years $0 $3,000 New van $94,000 $14,000 8 years $0 $11,750
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Hartley's Meat Pies is considering replacing its existing delivery van with a new one. The new van can offer considerable
savings in operating costs. Information about the existing van and the new van follow:
Original cost
Annual operating cost
Accumulated depreciation
Current salvage value of the existing van
Remaining life
Salvage value in 8 years
Annual depreciation
Relevant costs for this decision include
OA. the annual operating cost
B. the original cost of the existing var
OC. accumulated depreciation
D. the book value of the existing van
Existing van
$59,000
$21,500
$35,000
$23,500
8 years
SO
$3,000
New van
$94,000
$14,000
8 years
$0
$11,750
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