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Holliday Manufacturing is considering the replacement of an existing machine. The new machine costs $1.2 million and requires instillation costs of $150,000. The existing machine
Holliday Manufacturing is considering the replacement of an existing machine. The new machine costs $1.2 million and requires instillation costs of $150,000. The existing machine can be sold currently for $185,000 before taxes. It is two years old, cost $800,000 new, and has a $384,000 book value and a remaining useful life of 5 years. It was being depreciated under MACRS using a 5 year recovery period and therefore has the final 4 years of depreciation remaining. If it is held for 5 more years, the machine
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