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Novak company has a factory machine with a book value of $168,000 and a useful life of 4 years. Anew machine is available at a
Novak company has a factory machine with a book value of $168,000 and a useful life of 4 years. Anew machine is available at a cost of $252,000. This machine will have a four-year useful life with no salvage value. The new machine will lower annual variable manufacturing cost from $595,500 to $507,000. Prepare an analysis that shows whether Novak should retain or replace the old machines.
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