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A company has contracted to buy a new machine costing $ 5 1 5 0 0 0 and will receive a trade - in value
A company has contracted to buy a new machine costing $ and will receive a tradein value of $ for the old machine which has a book value of $ To maintain the machine the company must either recruit two staff at an estimated annual salary of $ each, or retrain two of the existing workforce at a total cost of $ If existing staff are used, two new recruits would need to be hired at a cost of $ each. The factory manager, whose annual salary is $ estimates that of his time would be spent supervising the three new recruits and of his time would be spent supervising the new maintenance staff, whether they are newly hired or internally trained.
What is the total relevant cost of this decision?
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