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Determine whether to retain or replace equipment

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Chudick company has a factory machine with a book value of $90,000 and a remaining useful life of 4 years. A new machine is available at a cost of $250,000. This machine will have a 4-year useful life with no salvage value. the new machine will lower the annual variable manufacturing cost from $600,000 to $500,000. Prepare an analysis showing wheaher the old machine should be retained or replaced.

Reference no: EM13524401

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