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Describe some Cost factors and non-cost-factors in an asset replacement decision

Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 Rakesh Sahu asked about 3 years ago

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 acharya answered almost 3 years ago

1.Capital cost of the new assets : The higher cost of the equipment or asset must be considered and compared with the realizable value of the existing asset

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 narahari answered about 3 years ago

Market standing of the product: If the product is likely to become obsolete or go out of fashion in the near future, it will not be worthwhile to go in for plant replacement. Nature of the market – capability of absorbing the product manufactured by the new plant in its entirety at the anticipated price. Constraints on the resources required for the new plant.

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