Running head: Response
Group Discussion Board 3: A response to Rae Fritsche and Judgement Case 6-5
Michael Grice
Liberty University
Grice 1
Running head: Response
Rae,
I’m glad you chose to discuss this judgement case as your topic this week, as I believe it’s
something we all encounter on a daily basis either in our personal lives (replacement of
technology, new phones, computers, etc.) or professional lives if we work or operate in a setting
such as that described in your judgment case scenario. Given the situation and information
presented, it’s good to know that there are actual accounting calculations that will allow an
individual to make an informed decision on how to handle their equipment inventory and to do
so with their best financial interest in mind.
I think you are spot on when you decided to investigate the present value of each asset to
determine if one should be replaced, etc. Honestly, I wasn’t sure where to begin with this case,
but after some research, I felt more comfortable with asset replacement. The article, Accounting
Explained, by Obaidullah stated that, “Decision regarding replacement of an existing asset with
another is based on the net present value…”, which only confirmed to me that you had selected
the correct calculations to justify your choice to either sell or retain the asset.
After reading your case, I really don’t have much to add to your analysis. I completely agree with
the accounting principle you’ve used to justify your resolution; I agree with the calculations that
you’ve used to compute your present values and expenses; and I agree with the decision you
reached to keep using the existing machinery until it gives out. I also think the decision you’ve
suggested the company make is a biblical one as well. Proverbs 10:4 says, “A slack hand causes
poverty, but the hand of the diligent makes rich.” I believe taking the time to calculate the
Grice 2
--y
Running head: Response
present value of assets like you have just done is you doing your diligent work to ensure
responsible financial decisions are made.
Grice 3
