Cranes manufacturing is considering the purchase of new equipment that costs $615,000 to replace equipment...
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Accounting
Cranes manufacturing is considering the purchase of new equipment that costs $615,000 to replace equipment that is old and inefficient. Crane has found a buyer for the old equipment who will pay $6,560 for it. The new equipment is expected to produce $9,840 of additional revenue each year but will result in additional maintenance cost of $1,640. The new equipment will have a salvage of $8,200 and will be depreciated over 10 years. Identify the amount and timing of the cash flows relevant to Cranes decision to purchase the new equipment. (Round answers to 0 decimal places, e.g. 25,000.)
Cash Flow
Time Period
Purchase price of new equipment
$enter a dollar amount
select a time period 101-100
Additional revenue
enter a dollar amount
select a time period 101-100
Additional maintenance cost
enter a dollar amount
select a time period 1001-10
Selling price of old equipment
enter a dollar amount
select a time period 101-100
Salvage value of equipment
Answer & Explanation
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