If we replace the old loader costs of 25000 if we

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: loader, costs of $25,000. If we replace the old loader, we will write-off the $25,000 when sold. There is we will write-off the $25,000 when sold. There is no difference in the cost, so it is not relevant.. no difference in the cost, so it is not relevant no not no not We will only have depreciation on the new loader We will only have depreciation on the new loader iiff we replace the old loader. This cost is relevant.. f iif we replace the old loader. This cost is rrelevant relevant elevant The $5,000 proceeds will only be realized if we The $5,000 proceeds will only be realized if we rreplace the old loader. This amount is relevant.. replace the old loader. This amount is rrelevant eplace relevant replace elevant The new loader will be depreciated in one year. 14-10 Relevant Costs Relevant The difference in operating costs is relevant The difference in operating costs is rrelevant elevant The The relevant to the immediate decision. to the immediate decision. 14-11 Relevant Costs Relevant Here is an analysis that includes only relevant costs: 14-12 Analysis of Special Decisions Analysis Let’s take a close look at some special decisions faced by many businesses. We just received a special order. Do you think we should accept it? 14-13 Accept or Reject a Special Order Accept • A travel agency offers Worldwide Airways • A travel agency offers Worldwide $150,000 for a round-trip flight from Hawaii $150,000 for a round-trip flight from Hawaii to Japan on a jumbo jet. to Japan on • Worldwide usually gets $250,000 in revenue • Worldwide usually gets $250,000 in revenue from this flight. from...
View Full Document

This note was uploaded on 02/10/2014 for the course ACCT 331 taught by Professor Kline during the Fall '10 term at Drexel.

Ask a homework question - tutors are online