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23 Saturn City Enterprises relies heavily on a copier machine to process its paperwork. Recently the copy clerk has not been able to process all
23 Saturn City Enterprises relies heavily on a copier machine to process its paperwork. Recently the copy clerk has not been able to process all the necessary copies within the regular work week Management is considering updating the copier machine with a faster model. Current Copier New Model Original purchase cost $27.000 $35,000 Accumulated depreciation $21,000 Estimated operating costs (annual) $10.000 $3,000 Useful life 6 years 6 years If sold now, the current copier would have a salvage value of $2,000. If operated for the remainder of its useful life, the current machine would have zero salvage value. The new machine is expected to have zero salvage value after six years. Which of the following alternatives is the correct choice in order for the company to maximize profit? a. Current copier is $12,000 advantageous. b. New model is $3,000 advantageous. New model is $9,000 advantageous, (d) New model is $7,000 advantageous
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