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Franklin Printing Company is considering replacing a machine that has been used in its factory for four years. Relevent data essociated with the operations of
Franklin Printing Company is considering replacing a machine that has been used in its factory for four years. Relevent data essociated with the operations of the old machine and the new machine, neither of which has any estimated residual value, are as follows: Old Machine Cost of machine, 10-year life Annual depreciation Annual manufacturing costs, excluding depreciation Annual nonmanufacturing operating cxpenses Annual revenue Current estimated selling price of the machine $108,000 10,800 9,000 11,500 94,100 36,000 straight-line) New Machine Cost of machine, six-year life Annual depreciation (staig-line) Estimated annual manufacturing costs, exclusive of depreciation Annual nonmanufacturing operating expenses and revenue are not expected to be affected by purchase of the new machine. $136,200 22,700 18,100 urchase or
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