Ernie Company Is Considering Replacing a Machine That Is Presently

Multiple Choice

Ernie Company is considering replacing a machine that is presently used in the production of its product.The following data are available: $$\begin{array} { l r r } & \text { Old Machine } & \begin{array} { r } \text { Replacement } \\\text { Machine }\end{array} \\\text { Original cost } & \$ 295,000 & \$ 188,000 \\\text { Useful life in years } & 11 & 5 \\\text { Current age in years } & 6 & 0 \\\text { Book value } & \$ 130,000 & - \\\text { Disposal value now } & \$ 52,000 & - \\\text { Disposal value in } 5 \text { years } & 0 & 0 \\\text { Annual cash operating costs } & \$ 39,000 & \$ 24,000\end{array}$$ The _____ is irrelevant.

A) original cost of the replacement machine
B) disposal value of the old machine
C) book value of the old machine
D) annual operating cost of the old machine