Bramble Corp. is considering the replacement of a piece of equipment with a newer model. The following data has been collected: Old Equipment New Equipment Purchase price $195000 $320000 Accumulated depreciation 78000 - 0 - Annual operating costs 257000 2
Bramble Corp. is considering the replacement of a piece of equipment with a newer model. The following data has been collected: Old Equipment New Equipment Purchase price $195000 $320000 Accumulated depreciation 78000 - 0 - Annual operating costs 257000 2
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter12: Capital Budgeting: Decision Criteria
Section: Chapter Questions
Problem 18P: Filkins Fabric Company is considering the replacement of its old, fully depreciated knitting...
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Bramble Corp. is considering the replacement of a piece of equipment with a newer model. The following data has been collected:
Old Equipment | New Equipment | ||
Purchase price | $195000 | $320000 | |
78000 | - 0 - | ||
Annual operating costs | 257000 | 203000 |
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.
Which of the following amounts is irrelevant to the replacement decision?
$52600
$117000
$320000
$257000
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