The Livie Corporation is considering replacing a machine. The following information is available: ...
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Accounting
The Livie Corporation is considering replacing a machine. The following information is available:
| Old Machine | New Machine | |
| Original cost | $65,000 | $40,000 |
| Useful life | 10 | 5 |
| Current age in years | 5 | 0 |
| Book value | $20,000 | |
| Current salvage value | $9,660 | |
| Salvage value in 5 years | $4,600 | $4,250 |
| Annual operating costs | $10,500 | $6,500 |
The incremental profit (loss) associated with purchasing the new machine is (incremental losses are indicated by a negative (-) sign):
Multiple Choice
-
-10,340
-
-14,940
-
-11,150
-
-26,690
-
-10,690
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