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Marigold Corp. is contemplating the replacement of an old machine with a new one. The following information has been gathered: Old Machine New Machine Price
Marigold Corp. is contemplating the replacement of an old machine with a new one. The following information has been gathered:
Old Machine | New Machine | ||
Price | $360000 | $720000 | |
Accumulated Depreciation | 108000 | -0- | |
Remaining useful life | 10 years | -0- | |
Useful life | -0- | 10 years | |
Annual operating costs | $288000 | $216000 |
If the old machine is replaced, it can be sold for $28800. The company uses straight-line depreciation with a zero salvage value for all of its assets. Which of the following amounts is relevant to the replacement decision?
| $360000 |
| $72000 |
| $108000 |
| $252000 |
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