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Cocoa Company is considering replacing a machine that is presently used in the production of its product. The following data are available: Replacement Machine Old
Cocoa Company is considering replacing a machine that is presently used in the production of its product. The following data are available: Replacement Machine Old Machine $160,000 5 0 Original cost Useful life in years Current age in years Book value Disposal value now Disposal value in 5 years Annual cash operating costs $200,000 10 5 $100,000 $52,000 0 $30,000 0 $14,000 Should Cocoa Company keep or replace the machine? Complete a schedule showing relevant and irrelevant costs for the next 5 years
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