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The defender's investment figure in a replacement study is its

  • A.original first cost
  • B.current book value
  • C.original cost less its salvage value
  • D.current market value

Answer: D

Keeping the asset means forgoing the money a sale would realise, so that forgone receipt is precisely what retention costs. The original cost is sunk and the book value is an accounting figure with no economic content of its own.

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