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Sheridan Company is considering replacing equipment with a cost of $30000, accumulated depreciation of $19800, and a 2 year remaining useful life. The new equipment
Sheridan Company is considering replacing equipment with a cost of $30000, accumulated depreciation of $19800, and a 2 year remaining useful life. The new equipment has a cost of $41700 and a useful life of 6 years. The seller has offered a trade-in allowance of $7700. The new equipment is much more efficient. Sheridan projects cost savings of $10400 per year if the new equipment is purchased. Which of the following is not relevant in deciding whether to retain or replace equipment? Cost savings. Trade-in allowance of existing equipment. Cost of new equipment. Book value of existing equipment
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