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a company is comcidering replacing an old piece of machinery, which cost $400,000 and has $175,000 of accumulated depreciation to date, with a new machine
a company is comcidering replacing an old piece of machinery, which cost $400,000 and has $175,000 of accumulated depreciation to date, with a new machine that has a purchase price of$550,000. The old machine could be sold $250,000. The annual variable production costs associated with the old machine are estimated to be $72,500 per year for 8 years. The annual variable costs for the new machine are estimated to be $24,000 per year for 8 years.
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