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Chung Inc. is considering the replacement of a piece of equipment with a newer model....

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Accounting

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Chung Inc. is considering the replacement of a piece of equipment with a newer model. The following data has been collected: OLD EQUIPMENT Purchase price $150,000 Accumulated depreciation $60,000 Annual operating costs $200,000 NEW EQUIPMENT Purchase Price $250,000 Accumulated Depreciation -0- Annual operating costs $160.000 If the old equipment is replaced now, it can be sold for $40,000. Both the old equipments remaining useful life and the new equipments useful life is 5 years. The net advantage (disadvantage) of replacing the old equipment with the new equipment is $40,000 $(10000) $150.000 $60000

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