Bramble Corp. is contemplating the replacement of an old machine with a new one. The following information has been gathered: Old Machine New Machine Price $420000 $840000 Accumulated Depreciation 126000 -0- Remaining useful life 10 years -0- Useful life -0- 10 years Annual operating costs $335000 $252000 If the old machine is replaced, it can be sold for $33600. 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 $(8400) $33500 $(84000) $23600
Bramble Corp. is contemplating the replacement of an old machine with a new one. The following information has been gathered: Old Machine New Machine Price $420000 $840000 Accumulated Depreciation 126000 -0- Remaining useful life 10 years -0- Useful life -0- 10 years Annual operating costs $335000 $252000 If the old machine is replaced, it can be sold for $33600. 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 $(8400) $33500 $(84000) $23600
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter12: Capital Budgeting: Decision Criteria
Section: Chapter Questions
Problem 18P: Filkins Fabric Company is considering the replacement of its old, fully depreciated knitting...
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Bramble Corp. is contemplating the replacement of an old machine with a new one. The following information has been gathered:
Old Machine | New Machine | ||
Price | $420000 | $840000 | |
Accumulated Depreciation | 126000 | -0- | |
Remaining useful life | 10 years | -0- | |
Useful life | -0- | 10 years | |
Annual operating costs | $335000 | $252000 |
If the old machine is replaced, it can be sold for $33600. 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
$(8400)
$33500
$(84000)
$23600
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