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Ridley Company has a factory machine with a book value of $80,600 and a remaining useful life of 4 years. A new machine is available

Ridley Company has a factory machine with a book value of $80,600 and a remaining useful life of 4 years. A new machine is available at a cost of $194,000. This machine will have a 4-year useful life with no salvage value. The new machine will lower annual variable manufacturing costs from $635,700 to $442,700. Prepare an analysis showing whether the old machine should be retained or replaced.

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