The machine considered being replaced, now five years old, originally had an expected life of 10 years and was being depreciated using the straight-line from RM120,000 down to zero. The machine could be sold for RM125,000.

This is related to capital budgeting question. I would like to ask RM120,000 is considered as Book Value or Annual Depreciation?

Sejati Electronic is a medium electronics manufacturer located in Perai industrial area. The company was founded 8 years ago with the original operation of repairing video players and other household appliances. Over the years, the company expanded into manufacturing and is now a reputable manufacturer of various electronics items. Competition from other company makes this company needs to maintain the quality of their production. Because of that, they need to ensure that the machine that they used in their operation must be sophisticated and not outdated. need to alway s update the machine The machine considered being replaced, now five years old, originally had an expected life of 10 years and was being depreciated using the straight-line from RM120,000 down to zero. The machine could be sold for RM125,000. Acc dep 1 SP=125000 The company (s considering replacing the old machine) with a new machine either from China known as Machine C or Japan known as Machine J. Below is the information provided for the new machine. The replacement of the old machine will result in the following changes: 1