Machine-translated by Google. Questions are authored in English.
Top

Discussion

The outsider viewpoint in a replacement study asks what a

  • A.manufacturer would charge for a replacement
  • B.lender would advance against the existing asset
  • C.newcomer to the business would pay for each asset
  • D.seller would accept for the existing asset

Answer: C

Correct answer: newcomer to the business would pay for each asset

The outsider viewpoint is a device for stripping out sentiment and history. Someone entering the business fresh would pay the market value for the existing asset and the purchase price for the new one, and would compare the two on future costs alone - which is exactly the comparison the analysis should make.

No comment is present. Be the first to comment.
Loading…

Post your comment

Please log in or register to post a comment.