Bramble Corp. is considering the replacement of a piece of equipment with a newer model. The following data has been collected: New Equioment $320000 Old Equipment Purchase price $192000 Accumulated 76800 -0- depreciation Annual operating 255000 222000 costs If the old equipment is replaced now, it can be sold for $52600. Both the old equipment's remaining useful life and the new equipment's useful life is 5 years. The company uses straight-line depreciation with a zero salvage value for all of its assets. The net advantage (disadvantage) (net effect on current year net income) of replacing the old equipment with the new equipment is (dori't consider annual operating costs in the computation) O $(11400) O $76800 O $(63000) O 552600

Bramble Corp. is considering the replacement of a piece of equipment with a newer model. The following data has been collected: New Equioment $320000 Old Equipment Purchase price $192000 Accumulated 76800 -0- depreciation Annual operating 255000 222000 costs If the old equipment is replaced now, it can be sold for $52600. Both the old equipment's remaining useful life and the new equipment's useful life is 5 years. The company uses straight-line depreciation with a zero salvage value for all of its assets. The net advantage (disadvantage) (net effect on current year net income) of replacing the old equipment with the new equipment is (dori't consider annual operating costs in the computation) O $(11400) O $76800 O $(63000) O 552600

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter9: Capital Budgeting And Cash Flow Analysis

Section: Chapter Questions

Problem 14P

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