Question
CAM Saved Help Save & Exit Mountain Gear has been using the same machines to make its name-brand clothing for the last five years. A
CAM Saved Help Save & Exit Mountain Gear has been using the same machines to make its name-brand clothing for the last five years. A cost efficiency consultant has suggested that production costs may be reduced by purchasing more technologically advanced machinery. The old machines cost the company $260,000. The old machines presently have a book value of $126,000 and a market value of $18,000. They are expected to have a five-year remaining life and zero salvage value. The new machines would cost the company $160,000 and have operating expenses of $18,000 a year. The new machines are expected to have a five-year useful life and no salvage value. The operating expenses associated with the old machines are $36,000 a year. The new machines are expected to increase quality, justifying a price increase and thereby Increasing sales revenue by $16,000 a year. Select the true statement. Multiple Choice The company will be $28,000 better off over the 5 year period if it replaces the old equipment The company will be $18,000 better off over the 5 year period if it replaces the old equipment. The romnanu will ha $52 000 hatter off over the 5 vaar nerind if it loans the old ensinment e 9 Asus
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