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Coffee All the Time, LLC is trying to decide whether it should keep its existing industrial espresso machine or purchase a new one that works
Coffee All the Time, LLC is trying to decide whether it should keep its existing industrial espresso machine or purchase a new one that works more efficiently (which translate into cost savings) than the existing machine. Information on each machine follows:
- | Old machine | New machine |
---|---|---|
Original cost | $10,000 | $25,000 |
Accumulated depreciation | 6,000 | 0 |
Annual cash operating costs | 9,500 | 5,000 |
Current salvage value of old toaster | 2,500 | - |
Salvage value in 10 years | 650 | 1,200 |
Remaining life | 12 yrs. | 12 yrs. |
The incremental cost to purchase the new espresso machine is
Group of answer choices
$17,500.
$22,500.
$25,000.
$15,000.
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