Q2. REPLACING EQUIPMENT Old Equipment: $300 000 $ 56 000 New Equipment: Cost $400 000...
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Q2. REPLACING EQUIPMENT Old Equipment: $300 000 $ 56 000 New Equipment: Cost $400 000 10 yr. Book Value Disposal Value (now) Remaining useful life Disposal Value at end Annual Estim. Sales Annual Operating cost 0 $480 000 $300 000 10 yr. $84,000 $500 000 $290 000 (A) Show the incremental 10-year profit if the new equipment is purchased. (B) If the disposal value of the current (old) equipment in 10 years would be $45,000 instead of zero; show the incremental 10-year profit if the new equipment is purchased
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