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Vaughn Manufacturing is contemplating the replacement of an old machine with a new one. The following information has been gathered: Old Machine $430000 Price Accumulated
Vaughn Manufacturing is contemplating the replacement of an old machine with a new one. The following information has been gathered: Old Machine $430000 Price Accumulated Depreciation Remaining useful life Useful life Annual operating costs New Maching $860000 -0- -0- 129000 10 years -0- $345000 10 years $258000 If the old machine is replaced, it can be sold for $34400. The company uses straight-line depreciation with a zero salvage value for all of its assets. The net advantage (disadvantage) of replacing the old machine is $44400 000 $34500 $(86000) $(8600)
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