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Problem: Module 6 Textbook Problem 10 Learning Objective: 6-5 Make appropriate asset replacement decisions Zachary...

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Problem: Module 6 Textbook Problem 10 Learning Objective: 6-5 Make appropriate asset replacement decisions Zachary Company is considering the replacement of some of its manufacturing equipment. Information regarding the existing equipment and the potential replacement equipment follows Existing Equipment Replacement Equipment Cost $106,000 Cost $123,000 Operating expenses 110.000 Operating expenses 105,000 Salvage value 22,000 Salvage Value 15,000 Market value 47,000 Useful life 9 years Book value 33,000 Renaining useful life 9 years "The amounts shown for operating expenses are the cumulative total of all such expected expenses to be incurred over the useful life of the equipment Required Calculate the total relevant cost of existing equipment and the potential replacement equipment Should the equipment be replaced? Old New Total cost Should the equipment be replaced

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