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Carrot Company is considering whether to replace a piece of equipment with a newer model. The following data have been collected: Purchase price Accumulated depreciation
Carrot Company is considering whether to replace a piece of equipment with a newer model. The following data have been collected: Purchase price Accumulated depreciation Annual operating costs Remaining useful life $6,200 $3,500 $6,600 5 years $8,200 $5,600 5 years If the old equipment is replaced now, it can be sold for $3,000. Both the old equipment and new equipment have a useful life of 5 years What is the net advantage (disadvantage) of replacing the old equipment with the new equipment? ($200) $200 O (53,200) $3,200
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