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mafiozo [28]
2 years ago
11

Amanda Company is considering the replacement of a machine that is presently used in production. The following data are​ availab

le: Old Machine New Machine Original cost ​$200,000 ​$160,000 Useful life in years 10 5 Current age in years 5 0 Book value ​$100,000 minus Disposal value now ​$32,000 minus Disposal value in 5 years 0 0 Annual cash operating costs ​$20,000 ​$14,000 Adding all five years​ together, the total relevant costs to consider if the new machine is purchased is
Business
1 answer:
NARA [144]2 years ago
5 0

Answer:

Explanation:

New machine cost =160,000

Annual cash operating cost = 14,000

Disposal value = 32,000

Calculations:

Original cost of New Machine 160,000

Total Annual cash operating costs 70000 [14000*5 ]

Less: Disposal value of Old Machine (32,000)  

Total relevant costs if the new machine is purchased 198,000  

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Why do businesses take financial cost into account other than social cost when making decisions.
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The correct answer to this open question is the following.

Although there are no options attached we can say the following.

Why do businesses take financial costs into account other than social costs when making decisions.?

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