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Larkspur is considering the replacement of a piece of equipment with a newer model. The following data has been collected: Old Equipment $234000 New Equipment
Larkspur is considering the replacement of a piece of equipment with a newer model. The following data has been collected: Old Equipment $234000 New Equipment $390000 93600 -0- Purchase price Accumulated depreciation Annual operating costs 312000 249600 If the old equipment is replaced now, it can be sold for $62400. Both the old equipment's remaining useful life and the new equipment's useful life is 5 years. For this question only, assume that six months ago Chung's equipment manager spent $31200 refurbishing the old equipment. Additionally, the equipment manager has determined that the new equipment can be rented out during idle periods to generate $1872 per year. Using this new information, what is the total cash flow associated with replacing the equipment? O ($318240) ($327600) O ($349440) O ($46800)
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