The objective of replacement analysis is to a. Compare the differences between n

Question

The objective of replacement analysis is to

a.   Compare the differences between new alternatives to determine if the increased costs are justified by the increased benefits.

b.   Compare the remaining cash flow effects of an existing unit (the defender) to the cash flows of the best available replacement unit (the challenger) to determine which is most economical.

c.   Compare the differences between existing alternatives to determine if the increased costs are justified by the increased benefits.

d.   Compare the remaining cash flow effects of an existing unit (the challenger) to the cash flows of the best available replacement unit (the defender) to determine which is most economical.

Explanation / Answer

Ans)

c.   Compare the differences between existing alternatives to determine if the increased costs are justified by the increased benefit.

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