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Johnson Enterprises uses a computer to handle its sales involces. Lately, business has been so good that it takes an extra 3 hours per night,
Johnson Enterprises uses a computer to handle its sales involces. Lately, business has been so good that it takes an extra 3 hours per night, plus everythird Saturday, to keep up with the volume of sales invoices Management is considering updating its computer with a faster model that would eliminate all of the overtime processing Current Machine $14.900 New Machine $25.200 $6,600 Original purchase cost Accumulated depreciation Estimated annual operating costs Remaining useful life $24,600 $19.000 5 years 5 years If sold now, the current machine would have a salvage value of $10.200. If operated for the remainder of its useful life, the current machine would have zero salvage value. The new machine is expected to have zero salvage value after 5 years. Prepare an incremental analysis to determine whether the current machine should be replaced in the first two columns, enter costs and expenses as positive amounts and any amounts received a negative amounts. In the third column, enter net income increases as positive amounts and decreases as negative amounts. Enter negative amounts using either a negative in preceding the number -45 or parentheses 3.1451 Retain Machine Replace Machine Net Income Increase (Decrease) $ Operating costs New machine cost Salvage value (old) Total $ The current machine should be
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