According to the net present value method, if the present value of cost savings exceeds the acquisition cost of a new machine:

A) the old machine should be retained.
B) the new machine should be purchased.
C) the old machine should be sold off without adding the new machine.
D) the old machine should be scrapped.

Net Present Value Method

A method used in capital budgeting to evaluate the profitability of an investment or project by calculating the present value of its expected cash flows minus the initial investment.

Cost Savings

The reduction in expenses achieved by improving efficiency, productivity, or reducing waste, often without compromising quality or performance.

Acquisition Cost

The total cost that a company recognizes on its financial statements for acquiring an asset or taking over another business.