Question

The book value of a machine, as shown on the balance sheet, is not relevant in a decision concerning the replacement of that machine by another machine. (Ignore taxes.) Group starts

Answer 1

The book value of a machine, as shown on the balance sheet, is not relevant in a decision concerning the replacement of that machine by another machine: TRUE

What is the book value?

• Book value is the worth of an asset based on its balance sheet account balance in accounting.
• The value of an asset is determined by subtracting the asset's original cost from any depreciation, amortization, or impairment expenses.
• Traditionally, a company's book value is equal to its total assets minus intangible assets and liabilities.
• In practice, however, depending on the source of the computation, book value may include either goodwill or intangible assets, or both.
• The value inherent in its employees, which is part of a company's intellectual capital, is always overlooked.
• When intangible assets and goodwill are specifically omitted, the indicator is frequently defined as "tangible book value."

Therefore, the statement "the book value of a machine, as shown on the balance sheet, is not relevant in a decision concerning the replacement of that machine by another machine" is TRUE.

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Complete question:

The book value of a machine, as shown on the balance sheet, is not relevant in a decision concerning the replacement of that machine by another machine. (Ignore taxes.) TRUE or FALSE