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What is the net advantage from replacing the old equipment

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Reference no: EM131796630

Carrot Company is considering whether to replace a piece of equipment with a newer model. The following data has been collected:

  Old Equipment New Equipment
Purchase price $5,800 $8,000
Accumulated depreciation 3,300 - 0 -
Annual operating costs 9,100 10,800

If the old equipment is replaced now, it can be sold for $1,000. Both the old equipment's remaining useful life and the new equipment's useful life is 5 years.

What is the net advantage (disadvantage) from replacing the old equipment with the new equipment?

Reference no: EM131796630

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