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Earth Company is considering replacing a machine that is presently used in the production of its product. The following data are available: Replacement Machine Old
Earth 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 $168,000 6 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 $286,000 11 5 $130,000 $71,000 0 $46,000 0 $24,000 Should Earth Company keep or replace the machine? Complete a schedule showing relevant and irrelevant costs for the next 6 years
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