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The TechGuide Company produces and sells 6,500 modular computer desks per year at a selling price of $550 each. Its current production equipment, purchased for
The TechGuide Company produces and sells 6,500 modular computer desks per year at a selling price of $550 each. Its current production equipment, purchased for $1,950,000 and with a 5 -year useful life, is only 2 years old. It has a terminal disposal value of $0 and is depreciated on a straight-line basis. The equipment has a current disposal price of $650,000. However, the emergence of a new molding technology has led TechGuide to consider either upgrading or replacing the production equipment. The following table presents data for the two alternatives: (Click to view the data for the two alternatives.) Read the Requirement 1. Should TechGuide upgrade its production line or replace it? Show your calculations. Determine the total relevant costs over 3 years. (If an input field is not used in the table, leave the input field empty, do not enter a zero. Use parentheses or a minus sign for numbers to be subtracted.) Data table
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