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Question 1 Chung Inc. is considering the replacement of a piece of equipment with a newer model. The following data has been collected: Old Equipment

Question 1

Chung Inc. is considering the replacement of a piece of equipment with a newer model. The following data has been collected:

Old Equipment

New Equipment

Purchase price $225,000 $375,000
Accumulated depreciation 90,000 - 0 -
Annual operating costs 300,000 240,000

If the old equipment is replaced now, it can be sold for $60,000. Both the old equipment

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