first day it was used. It can either be disposed of for $5,000 cash
and be replaced with a similar truck costing $27,000, or rebuilt
for
$20,000 and be brand new as far as operating characteristics and
looks are concerned. The net relevant cost of the replacing
option
is:
Student Answer:
$5,000.
$20,000.
$22,000.
$25,000.
UNIT 4 QUIZ
Question 15. Question : Carmino Company is considering an
investment in equipment that
will generate an after-tax income of $6,000 for each year of its
four-year life. The asset has no salvage value. The firm is in the
40% tax bracket. The net book value (NBV) of the investment at