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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 $290000 $580000 87000 -0- 10 years -0- -0- 10 years $235000 $174000 Remaining useful life Useful life Annual operating costs If the old machine is replaced, it can be sold for $23200. 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 $(58000) O $53200 O $23500 O $(5800)
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