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A company is considering replacing an old equipment with one of two alternatives that have the same useful life. The following data regarding the two
A company is considering replacing an old equipment with one of two alternatives that have the same useful life.
The following data regarding the two alternatives are provided:
Cost Item Equipment A Equipment B
(i) Cost $2,000,000 $1,900,000
(ii) Annual insurance $50,000 $50,000
(iii) Annual maintenance $100,000 $130,000
Which of the above cost item, as reflected by their number, are relevant?
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