Zachary Company is considering the replacement of some of its manufacturing equipment. Information regarding the...
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Accounting
Zachary Company is considering the replacement of some of its manufacturing equipment. Information regarding the existing equipment and the potential replacement equipment follows Existing Equipment Replacement Equipment Cost Operating expenses* Salvage value Market value Book value Remaining useful life $118,000 111,000 22,000 42,000 34,000 Cost Operating expenses* Salvage value Useful life $111,000 114,000 14,000 7 years 7 years The amounts shown for operating expenses are the cumulative total of all such expected expenses to be incurred over the useful life of the equipment. Required Calculate the total relevant cost of existing equipment and the potential replacement equipments. Should the equipment be replaced? Old New Total cost Should the equipment be replaced
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