Starling Co. is considering disposing of a machine with a book value of $21,900 and...
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Starling Co. is considering disposing of a machine with a book value of $21,900 and estimated remaining life of five years. The old machine can be sold for $5,900. A new high-speed machine can be purchased at a cost of 67,100 . It will have a useful life of five years and no residual value. It is estimated that the annual variable manufacturing costs will be reduced from $23,400 to $19,900 if the new machine is purchased. The five-year differential effect on profit from replacing the machine is a(n) a. decrease of 556,810 b. increase of 556,810 c. decrease of $43,700 d. increase of $43,700
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