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Kobe Company has a factory machine with a book value

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Question;Kobe Company has a factory machine with a book value of $90,100 and a remaining useful life of 5 years. It can be sold for $31,400. A new machine is available at a cost of $229,600. This machine will have a 5-year useful life with no salvage value. The new machine will lower annual variable manufacturing costs from $591,900 to $442,400. Prepare an analysis showing whether the old machine should be retained or replaced.

 

Paper#49822 | Written in 18-Jul-2015

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