EXERCISE 9-11
Decision Net Income
Replace Retain Increase
Machine Machine (Decrease)
New machine cost $9,000 25,000 ($16,000) 5 year period
Operating costs 24000 18,000 6,000
Salvage value (old) 800 5,000 ($4,200)
Total $33,800 $48,000 ($14,200)
Replace ? Why ? Yes, The current machine should be replaced, because the maintaining…
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