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Coronado Industries is contemplating the replacement of an old machine with a new one. The following information has been gathered: Old Machine New Machine Price
Coronado Industries is contemplating the replacement of an old machine with a new one. The following information has been gathered: Old Machine New Machine Price $292000 $592000 87600 -0- Accumulated Depreciation Remaining useful life Useful life 10 years -0- -0- 10 years Annual operating costs $233600 $173600 If the old machine is replaced, it can be sold for $24000. 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 $(59200) $32000 $23360 $(5920)
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