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Mountain Gear has been using the same machines to make its name-brand clothing for the last five years. A cost efficiency consultant has suggested that

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Mountain Gear has been using the same machines to make its name-brand clothing for the last five years. A cost efficiency consultant has suggested that production costs may be reduced by purchasing more technologically advanced machinery. The old machines cost the company $220,000. The old machines presently have a book value of $122,000 and a market value of $14,000. They are expected to have a five-year remaining life and zero salvage value. The new machines would cost the company $120,000 and have operating expenses of $17,000 a year. The new machines are expected to have a five-year useful life and no salvage value. The operating expenses associated with the old machines are $32,000 a year. The new machines are expected to increase quality. Justifying a price increase and thereby increasing sales revenue by $12,000 a year. Select the true statement. Multiple Choice The company will be $29.000 better off over the year period if it replaces the old oculoment The company will be $30.000 better off over the year period it is replaces the old equipment. The company will be $44.000 beter off over the year period if it keeps the old equipment, The company will be $1.000 better off over the year period it replaces the old equament

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