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Kahn Company pald $240,000 to purchase a machine on January 1, Year 1. During Year 3, a technological breakthrough resulted In the development of a
Kahn Company pald $240,000 to purchase a machine on January 1, Year 1. During Year 3, a technological breakthrough resulted In the development of a new machine that costs $300,000. The old machine costs $100,000 per year to operate, but the new machine could be operated for only $36,000 per year. The new machine, which will be avallable for dellvery on January 1, year 3 , has an expected useful life of four years. The old machine is more durable and is expected to have a remaining useful life of four years. The current market value of the old machine is $80,000. The expected salvage value of both machines is zero. Required Calculate the total avoldable costs In keeping the old machine and buying a new machine. Should the machine be replaced
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