Question 1
Which of the following is true in a decision to keep or replace existing equipment?
◦ The book value of the old equipment is relevant.
◦ The disposal value of the old equipment is relevant.
◦ Property taxes is relevant.
◦ Depreciation on the new equipment is relevant.
Question 2
When replacing an old machine with a new machine, the book value of the old machine is a relevant cost.
◦ true
◦ false