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Bonita Industries is contemplating the replacement of an old machine with a new one. The following information has been gathered: Old Machine New Machine Price
Bonita Industries is contemplating the replacement of an old machine with a new one. The following information has been gathered: Old Machine New Machine Price $240000 $450000 Accumulated Depreciation 72000 -0- Remaining useful life 10 years -0- Useful life 0- 10 years Annual operating costs $192000 $144000 If the old machine is replaced, it can be seld for $19000. The company uses straight-line depreciation with a zero salvage value for all of its assets. The net advantage (disadvantage) of replacing the old machine is $210000 $49000 O $29000 O $48000 OOOO
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