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3. Snappy just purchased a $100,000 scanner last year. The scanner has a useful life of 4 years and was estimated to have no residual value. The depreciation method that the company uses is the straight line method. The annual operating cost for this scanner is $105,000. However, Snappy was offered a new scanner this year that costs $110,000, but will save Snappy $25,000 of annual operating costs. This scanner has a useful life of 3 years with no salvage value. Their old scanner could be sold at $50,000 after a 1-yearuse if they want to change to the new scanner. Should Snappy replace or keep the scanner? Provide the incremental analysis for your answer.

3. Snappy just purchased a $100,000 scanner last year. The scanner has a useful life of 4 years and was estimated to have no residual value. The depreciation method that the company uses is the straight line method. The annual operating cost for this scanner is $105,000. However, Snappy was offered a new scanner this year that costs $110,000, but will save Snappy $25,000 of annual operating costs. This scanner has a useful life of 3 years with no salvage value. Their old scanner could be sold at $50,000 after a 1-yearuse if they want to change to the new scanner. Should Snappy replace or keep the scanner? Provide the incremental analysis for your answer.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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3. Snappy just purchased a $100,000 scanner last year. The scanner has a useful life of 4 years and was estimated to have no residual value. The depreciation method that the company uses is the straight line method. The annual operating cost for this scanner is $105,000. However, Snappy was offered a new scanner this year that costs $110,000, but will save Snappy $25,000 of annual operating costs. This scanner has a useful life of
3 years with no salvage value. Their old scanner could be sold at $50,000 after a 1-yearuse if they want to change to the new scanner. Should Snappy replace or keep the scanner? Provide the incremental analysis for your answer. 

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