Starling Co. is considering disposing of a machine with a book value of $20,900 and...
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Starling Co. is considering disposing of a machine with a book value of $20,900 and estimated remaining life of five years. The old machine can be sold for $5,500. A new high-speed machine can be purchased at a cost of 70,700. It will have a useful life of five years and no residual value. It is estimated that the annual variable manufacturing costs will be reduced from $23,500 to $20,800 if the new machine is purchased. The differential effect on income for the new machine for the entire five years is a. decrease of $51,700 b. increase of $51,700 c. increase of $67,210 d. decrease of $67,210
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