In a Decision Concerning Replacing Equipment

Multiple Choice

In a decision concerning replacing equipment

A) with new equipment, the book value of the old equipment can be considered an opportunity cost.
B) or keeping it, the salvage value of the old equipment is a sunk cost in incremental analysis.
C) with new equipment, old equipment which is not fully depreciated should always be replaced.
D) any trade-in allowance or cash disposal value of existing assets is relevant to the decision to retain or replace equipment.