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umka21 [38]
4 years ago
14

LC Corp. has an old machine with operating costs of $164,200 per year and a net book value of $23,000. LC is looking at two repl

acement options. Option A costs $210,000 and has $118,000 per year of operating costs. Option B costs $216,000 and has $114,400 of annual operating costs. All machines have a six year life and a $0 salvage value. The old machine could be sold for $19,200 today. Which of the following lists LC’s options from least costly to most costly?A : Retaining the old machine is least costly, followed by option B, then option A.B :Option B is least costly, followed by option A, then retaining the old machine.C :Retaining the old machine is least costly, followed by option A, then option B.D :Option A is the least costly, followed by option B, then retaining the old machine.
Business
1 answer:
Aleksandr [31]4 years ago
7 0

Answer:

B :Option B is least costly, followed by option A, then retaining the old machine

Explanation:

The computation for each machine is shown below:

Old machine:

= Per year operating cost × number of years - salvage value

= $164,200 × 6 years - $19,200

= $985,200 - $19,200

= $966,000

Option A:

= Purchase Cost + Per year operating cost × number of years

= $210,000 + $118,000 × 6 years

= $210,000 + $708,000

= $918,000

Option B:

= Purchase Cost + Per year operating cost × number of years

= $216,000 + $114,400 × 6 years

= $216,000 + $686,400

= $902,400

By comparing the three machines, we get to know that the option B is least cost out of the available options

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Answer:

The Balanced Scorecard for Management Control

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Looking at the value package of BSC, I agree with Dana that the BSC approach is better than using only financial controls alone.  While financial controls are at the very core of resource management and operational efficiency in any organization, they do not represent the whole picture of management control.  They are the endgames and not the starting strategies for a winning organization.

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