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Your Answer Correct Answer (Used) Laguna Manufacturing is considering replacing a piece of equipment with...

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Accounting

Your Answer Correct Answer (Used) Laguna Manufacturing is considering replacing a piece of equipment with a newer, more efficient model. The old equipment was purchased several years ago for $112,500 and has annual operating costs of $150,000, accumulated depreciation of $45,000, and a 5- year remaining useful life. The new equipment being considered costs $187,500, has annual operating costs of $120,000, and has a 5- year useful life. If new equipment is purchased, the old equipment could be sold for $30,000. Should Laguna purchase the new equipment, and why? Yes, because doing so will increase the company's net income by $45,000. No, because doing so will cause the company's net income to decrease by $7,500. Yes, because doing so will cause the company's net income to increase by $30,000. No, because doing so will cause the company net income to decrease by $37,500. CONTINUE

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