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Coronado Industries is contemplating the replacement of an old machine with a new one. The following information has been gathered: Price Accumulated Depreciation Old
Coronado Industries is contemplating the replacement of an old machine with a new one. The following information has been gathered: Price Accumulated Depreciation Old Machine New Machine $400000 $800000 120000 -0- Remaining useful 10 years -0- life Useful life -0- 10 years Annual operating costs $325000 $240000 If the old machine is replaced, it can be sold for $32000. The company uses straight-line depreciation with a zero salvage value for all of its assets. The net advantage (disadvantage) of replacing the old machine is $(8000) $32500 $(80000) $82000
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