In conducting a replacement study

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Reference no: EM13834772

Equipment purchased 2 years ago for $70,000 was expected to have a useful life of 5 years with a $5,000 salvage value. Its performance was less tha expected and it was upgraded for $30,000 one year ago. Increased demand now requires that the equipment be upgraded again for an additional $25,000 or replaced with new equipment that will cost $85,000. If replaced the existing equipment will be sold for $6,000. In conducting a replacement study, the first cost that should be used for the presently owned machine is:

a. $31,000

b. $25,000

c. $6,000

d. $22,000

Reference no: EM13834772

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