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Standard Lathe High Speed Lathe Original cost new................. $40,000 $60,000 Accumulated depreciation to date 10,000 ------ Current salvage value 8,000 ------ Estimated cost per year
Standard Lathe High Speed Lathe Original cost new................. $40,000 $60,000 Accumulated depreciation to date 10,000 ------ Current salvage value 8,000 ------ Estimated cost per year to operate 36,000 21,000 Remaining years of useful light 5 years 5 years Prepare a computation covering the five-year period that will show the net advantage or disadvantage of purchasing the high-speed lathe. Ignore income taxes, and use only relevant costs in your analysis
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