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Marigold Corp. is considering the replacement of piece of equipment with a newer model. The following data has been collected: Old Equipment New Equipment Purchase
Marigold Corp. is considering the replacement of piece of equipment with a newer model. The following data has been collected: Old Equipment New Equipment Purchase price $247500 $412500 Accumulated depreciation 99000 -0- Annual operating 330000 264000 costs If the old equipment is replaced now, it can be sold for $66000. Both the old equipment's remaining useful life and the new equipment's useful life is 5 years. The company uses straight-line depreciation with a zero salvage value for all of its assets. For the 5-year period, what is the increase or decrease in net income associated with the new equipment? O $(82500) O $66000 $99000 O $(16500)
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