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Haven Inc. is considering the purchase of a new machine for its business. Their current machinery cost $250,000 and has accumulated depreciation of $50,000. The
Haven Inc. is considering the purchase of a new machine for its business. Their current machinery cost $250,000 and has accumulated depreciation of $50,000. The new machine costs $350,000; the old machine can sell for $210,000. Both machines are expected to last another 5 years from today. The new machine would increase efficiency and save the business $25,000 per year for the 5 year life. Should Haven replace their machinery with the new machine? Ignore the time value of money. None of the above answers is correct No, the net cash outflow is $(115,000) No, the net cash outflow is $(15,000) Yes, the net cash inflow is $85,000 No, the net cash outflow is $(350,000)
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