Question
Chung Inc. is considering the replacement of a piece of equipment with a newer model. The following data has been collected: Old Equipment New Equipment
Chung Inc. is considering the replacement of a piece of equipment with a newer model. The following data has been collected:
| Old Equipment | New Equipment | |||
| Purchase price | $225,000 | $375,000 | ||
| Accumulated Depreciation | 90,000 | -0- | ||
| Annual operating costs | 300,000 | 240,000 |
If the old equipment is replaced now, it can be sold for $60,000. Both the old equipment's remaining useful life and the new equipment's useful life is 5 years. Which of the following amounts is irrelevant to the replacement decision?
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Financial Accounting SG
Authors: Meigs
7th Edition
0070422591, 978-0070422599
