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Sheffield Corp. is considering the replacement of a piece of equipment with a newer model. The following data has been collected: a Old Equipment New

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Sheffield Corp. is considering the replacement of a piece of equipment with a newer model. The following data has been collected: a Old Equipment New Equipment Purchase price $342000 $560000 Accumulated depreciation 136800 -0 Annual operating costs 450000 387000 If the old equipment is replaced now, it can be sold for $93100. Both the old equipment's remaining useful life and the new equipment's useful life is 5 years. The company uses straight-line depreciation with a zero salvage value for all of its assets. The net advantage (disadvantage) of replacing the old equipment with the new equipment is O $(108000) O $(151900) O $93100 O $136800

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