16 . Which one of the following costs , if any , is relevant in making financial decisions ?
17 . Buff Co . is considering replacing an old machine with a new machine . Which of the following items is economically relevant to Buff ' s decision ? ( Ignore income tax considerations .)
18 . The ABC Company is trying to decide between keeping an existing machine and replacing it with a new machine . The old machine was purchased just two years ago for $ 50,000 and had an expected life of 10 years . It now costs $ 1,000 a month for maintenance and repairs , due to a mechanical problem . A new replacement machine is being considered , with a cost of $ 60,000 . The new machine is more efficient and it will only cost $ 200 a month for maintenance and repairs . The new machine has an expected life of 10 years . In deciding to replace the old machine , which of the following factors , ignoring income taxes , should ABC not consider ?
19 . Egan Co . owns land that could be developed in the future . Egan estimates it can sell the land for $ 1,200,000 , net of all selling costs . If it is not sold , Egan will continue with its plans to develop the land . As Egan evaluates it options for development or sale of the property , what type of cost would the potential selling price represent in Egan ' s decision ?
20 . Which of the following statements is true regarding opportunity cost ?
21 . For the year ended December 31 , 2004 , Abel Co . incurred direct costs of $ 500,000 based on a particular course of action during the year . If a different course of action had been taken , direct costs would have been $ 400,000 . In addition , Abel ' s 2004 fixed costs were $ 90,000 . The incremental cost was
22 . Pole Co . is investing in a machine with a 3-year life . The machine is expected to reduce annual cash operating costs by $ 30,000 in each