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Sala Co. is contemplating the replacement of an old machine with a new one. The following information has been gathered: If the old machine is
Sala Co. is contemplating the replacement of an old machine with a new one. The following information has been gathered: If the old machine is replaced, it can be sold for $24,000. Which of the following amounts is relevant to the replacement decision?
Old Machine New Machine
Price: $300,000 $600,000
Accumulated Depreciation: 90,000 0
Remaining Useful Life: 10 years 0
Useful Life: 0 10 years
Annual operating costs: $240,000 $180,600
a. $210,000
b. $300,000
c. $59,400
d. $90,000
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