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Vaughn Manufacturing is contemplating the replacement of an old machine with a new one. The following information has been gathered: Price Accumulated Depreciation Old Machine
Vaughn Manufacturing is contemplating the replacement of an old machine with a new one. The following information has been gathered: Price Accumulated Depreciation Old Machine New Machine $430000 $860000 129000 -0- 10 years -0- -0 10 years $345000 $258000 Remaining useful life Useful life Annual operating costs 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 0 $(86000) 0 $34500 $44400 O $(8600) In which of the following situations would a company not set the prices of its products? o When there are few or no other producers capable of making a similar product O When the product is specially made for a customer O When the product is not easily differentiated from competing products O When the product can be effectively differentiated from others
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