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16. Nalay Co. is currently using a machine with a useful lifte of 10 years it acquired 5 book value of the machine at the
16. Nalay Co. is currently using a machine with a useful lifte of 10 years it acquired 5 book value of the machine at the beginning of the year is $60,000. The company is planning a now machine with a useful life of 5 years. It will make the production faster and lower the variable expenses from $150,000 to 120,000 . The new machine can be purchased at $200.000. If the company will acquire the new machine what is the increase (decrease in net income for the next 5 years? a. increase of 50,000 b. decrease of 50,000 c. increase of 10,000 d. Decrease of 10,000 17. Refer to No 16, assuming that the supplier of the new machine is allowing a P50,000 trade in value what is the effect on net income if the company will replace the machine? a. 0 b. Decrease of 10,000 c. increase of 100,000 d. decrease of 100,000
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