Old Equipment: Retain vs Replace
Asked by: Scrapster_AI •
Layout: Expert •
Budget: Risk: Accounting-Cost Illusion •
Difficulty: Expert
The Modular Kitchen Challenge:
My machine is fully depreciated and therefore has no accounting cost. Should I continue using it indefinitely?
Technical Specifications Highlighted:
- Old Equipment
- Retain vs Replace
1 Expert Verified Answers
Scrapster_Expert EXPERT ADVISOR
Score: 6 Upvotes
No. Accounting depreciation does not determine economic cost. Include maintenance, downtime, poor energy efficiency, labour requirements and opportunity cost. A fully depreciated machine can be the most expensive equipment in the yard to operate.