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7 Exercise 6-18A (Static) Asset replacement decision LO 6-5 32 nts eBook Hint A machine purchased three years ago for $720,000 has a current book

7 Exercise 6-18A (Static) Asset replacement decision LO 6-5 32 nts eBook Hint A machine purchased three years ago for $720,000 has a current book value using straight-line depreciation of $400,000; its operating expenses are $60,000 per year. A replacement machine would cost $480,000, have a useful life of nine years, and would require $26,000 per year in operating expenses. It has an expected salvage value of $130,000 after nine years. The current disposal value of the old machine is $170,000; if it is kept 9 more years, its residual value would be $20,000. Required Calculate the total costs in keeping the old machine and purchase a new machine. Should the old machine be replaced? Keep Old Machine Purchase New Machine Total costs Should the old machine be replaced? eferences

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