A machine with a book value of $80,000 has an estimated 5-year life. A proposal...
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Accounting
A machine with a book value of $80,000 has an estimated 5-year life. A proposal is offerred to sell the old machine for $50,500 and replace it with a new machine at a cost of $75,000. The new machine has a 5-year life with no residual value. The new machine would reduce annual direct labor costs from $11,200 to $7,400. Prepare a differential analysis whether to continue with the old machine or place the old machine.
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