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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 $220000 New Machine
Marigold Corp. is contemplating the replacement of an old machine with a new one. The following information has been gathered: Old Machine $220000 New Machine $440000 Price 66000 -0- -0- 10 years Accumulated Depreciation Remaining useful life Useful life Annual operating costs -0- 10 years $132000 $175000 If the old machine is replaced, it can be sold for $17600. The company uses straight-line depreciation with a zero salvage value for all of its assets. The net advantage (disadvantage) of replacing the old machine is 0 $7600 0 $17500 O $(4400) 0 $(44000)
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