A machine purchased three years ago for $313,000 has a current book value using straight-line...
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A machine purchased three years ago for $313,000 has a current book value using straight-line depreciation of $176,000; its operating expenses are $38,000 per year. A replacement machine would cost $221,000, have a useful life of ten years, and would require $12,000 per year in operating expenses. It has an expected salvage value of $71,000 after ten years. The current disposal value of the old machine is $83,000; if it is kept 10 more years, its residual value would be $13,000. Required Calculate the total costs in keeping the old machine and purchase a new machine. Should the old machine be replaced? Yes No
A machine purchased three years ago for $313,000 has a current book value using straight-line depreciation of $176,000; its operating expenses are $38,000 per year. A replacement machine would cost $221,000, have a useful life of ten years, and would require $12,000 per year in operating expenses. It has an expected salvage value of $71,000 after ten years. The current disposal value of the old machine is $83,000; if it is kept 10 more years, its residual value would be $13,000. Required Calculate the total costs in keeping the old machine and purchase a new machine. Should the old machine be replaced? Yes No
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