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Which of the following statements best describes when an asset should be replaced? I - The...

Which of the following statements best describes when an asset should be replaced?

I - The defender should be used until its annual cost of operation exceeds the annual cost of using the challenger.

II - The challenger should replace the defender at the end of the defender's lifespan.

III - The challenger should replace the defender whenever the challenger's ESL is reached.

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Answer #1

I ) The defender should be used until it's annual cost of operations exceeds the annual cost of using the Challenger

An asset should be used until it's annual cost of operation of present asset exceeds annual cost of using replacement asset.

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