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Bramble Industries is considering the purchase of new equipment costing $1,430,000 to replace existing equipment that will be sold for $157,000. The new equipment is
Bramble Industries is considering the purchase of new equipment costing $1,430,000 to replace existing equipment that will be sold for $157,000. The new equipment is expected to have a $203,000 salvage value at the end of its 4-year life. During the period of its use, the equipment will allow the company to produce and sell an additional 34,800 units annually at a sales price of $30 per unit. Those units will have a variable cost of $14 per unit. The company will also incur an additional $87,000 in annual fixed costs.
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