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Business, 07.11.2019 03:31 TheSpeedster

Sprockets corporation is thinking about replacing a piece of manufacturing equipment with a remaining useful life of six years and a $0 salvage value. the book value of the equipment is $55,000, and the machine could be sold in its current condition for $29,000. the new machine would cost $125,000 and would have no salvage value at the end of its six-year useful life. with the new machine, sprockets’ annual variable operating costs would drop from $78,000 to $65,000. given these data, sprockets would over the next six years if it purchases the new machine.

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