What costs not relevant to the decision of whether or not

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Problem 1: iSooky has a spotter truck with a book value of $50,000 and a remaining useful life of 5 years. At the end of the five years the spotter truck will have a zero salvage value. The market value of the spotter truck is currently $37,000. iSooky can purchase a new spotter truck for $130,000 and receive $32,000 in return for trading in its old spotter truck. The new spotter truck will reduce variable manufacturing costs by $13,000 per year over the five-year life of the new spotter truck. The costs not relevant to the decision of whether or not to replace the spotter truck are:

Multiple Choice

Option 1: $32,000.
Option 2: $13,000.
Option 3: $65,000.
Option 4: $130,000.
Option 5: $50,000.

Reference no: EM132877465

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