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Current Attempt in Progress Sleek Looks has been using the same machines to make its name brand clothing for the last five years. A cost
Current Attempt in Progress Sleek Looks has been using the same machines to make its name brand clothing for the last five years. A cost efficiency corsultant has suggested that production costs may be reduced by purchasing more technologically advanced machinery. The old machines cost the company \\( \\$ 100,000 \\). The old machines presently have a book value of \\( \\$ 60,000 \\) and a market value of \\( \\$ 6,000 \\). They are expected to have a five-year remaining life and zero salvage value. The new machines would cost the company \\( \\$ 50,000 \\) and have operating expenses of \\( \\$ 9,000 \\) a year. The new machines are expected to have a five-year useful life and no salvage value. The operating expenses associated with the old machines are \\( \\$ 15,000 \\) a year. The new machines are expected to increase quality, justifying a price increase, and thereby increasing sales revcnue by \\( \\$ 5,000 \\) a year. Which of the following statements is true? The company will be \\( \\$ 20,000 \\) better off over the 5 -year period if it keeps the old equipment. The company will be \\( \\$ 6.000 \\) better off over the 5 -year period if it replaces the old equipment. The company will be \\( \\$ 12.000 \\) better off over the 5 -year peciod if it replaces the old equipment. The company will be \\( \\$ 11.000 \\) better off over the 5 -year period if it replaces the oid cquipment
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