question archive A machine purchased three years ago for $308,000 has a current book value using straight-line depreciation of $194,000; its operating expenses are $37,000 per year
A machine purchased three years ago for $308,000 has a current book value using straight-line depreciation of $194,000; its operating expenses are $37,000 per year
Subject:AccountingPrice: Bought3
A machine purchased three years ago for $308,000 has a current book value using straight-line depreciation of $194,000; its operating expenses are $37,000 per year. A replacement machine would cost $238,000, have a useful life of ten years, and would require $9,000 per year in operating expenses. It has an expected salvage value of $76,000 after ten years. The current disposal value of the old machine is $85,000; if it is kept 10 more years, its residual value would be $16,000. Required Calculate the total costs in keeping the old machine and purchase a new machine. Should the old machine be replaced? Keep Old Machine Purchase New Machine Total costs Should the old machine be replaced?
