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At the beginning of last year (2019). Richter Condos installed a mechanized elevator forits tenants. The owner of the company. Ron Richter,recently returned from an
At the beginning of last year (2019). Richter Condos installed a mechanized elevator forits tenants. The owner of the company. Ron Richter,recently returned from an speed, comfort of ride, and cost efficiency asked his purchasing agent to collect price and operating cost data on the new elevator. In addition, he asked the company's exhibition where he watched a computerized elevator demonstrated. He was impressed with the elevators him with cost data on the company's elevator. This information is presented below Old Elevator New Elevator $102500 $159000 Estimated salvage value 0 0 Estimated useful life 5 years 4 years Depreciation method Straight-line Straight-line Annual operating costs other than depreciation: $9000 Variable $34000 Fixed 23400 8000 Annual revenues are $240000, and selling and administrative expenses are $28000, regardless of which elevator is used. If the old elevator is replaced now, at the beginning of 2020, Richter Condos will be able to sell it for $25100
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