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Swifty Fashions needs to replace a beltloop attacher that currently costs the company $50,000 in annual cash operating costs. This machine is of no use
Swifty Fashions needs to replace a beltloop attacher that currently costs the company $50,000 in annual cash operating costs. This machine is of no use to another company, but it could be sold as scrap for $3,060. Managers have identified a potential replacement machine, Euromats Model HD-435.
The HD-435 is priced at $49,620 and would cost Swifty Fashions $40,000 in annual cash operating costs. The machine has a useful life of 11 years, and it is not expected to have any salvage value at the end of that time.
Accounting rate of return?
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