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Sala Co. is contemplating the replacement of an old machine with a new one. The following information has been gathered: Old Machine New Machine
Sala Co. is contemplating the replacement of an old machine with a new one. The following information has been gathered: Old Machine New Machine Purchase Price $300,000 $600,000 Accumulated Depreciation 90,000 -0- Annual operating costs $240,000 $180,600 If the old machine is replaced, it can be sold for $30,000. Both machines have a remaining useful life of 10 years. The net advantage (disadvantage) of replacing the old machine is O $30,000 O $24,000 O $120,600 O 12,000
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