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The management of Ballard MicroBrew is considering the purchase of an automated bottling machine for $60,000. The machine would replace an old piece of equipment
The management of Ballard MicroBrew is considering the purchase of an automated bottling machine for $60,000. The machine would replace an old piece of equipment that costs $15,000 per year to operate. The new machine would cost $6,000 per year to operate. The old machine currently in use is fully depreciated and could be sold now for a salvage value of $20,000. The new machine would have a useful life of 10 years with no salvage value.
2. What is the annual incremental net operating income provided by the new bottling machine?
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