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ijohnh14
ijohnh14
24.04.2020 • 
Business

Gull Corp. is considering selling its old popcorn machine and replacing it with a newer one. The old machine has a book value of $5,000, and its remaining useful life is five years. Annual costs are $4,000. A high school is willing to buy it for $2,000. New equipment would cost $18,000 with annual operating costs of $1,500. The new machine has an estimated useful life of five years. Should the machine be replaced? Support your answer with calculations. Proposal to Replace Equipment Annual Costs - Present Equipment $ Annual Costs - New Equipment Annual Differential Decrease in Cost $ Number of Years Applicable X Total Differential Decrease in Cost $ Proceeds from Sales of Present Equipment $ Cost of New Equipment Net Differential Increase in Cost - New Equipment

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