estion 15 effield Corp. is considering the replacement of a piece of equipment with a new urchase price ccumulated depreciation annual operating costs Old Equipment $212000 84800 244000 New Equipment $352000 -0- 244000 "the old equipment is replaced now, it can be sold for $58000. Both the old equil traight-line depreciation with a zero salvage value for all of its assets. The net advantage (disadvantage) of replacing the old equipment with the new em O $58000 O $84800 O $(109000) O $(69000)
estion 15 effield Corp. is considering the replacement of a piece of equipment with a new urchase price ccumulated depreciation annual operating costs Old Equipment $212000 84800 244000 New Equipment $352000 -0- 244000 "the old equipment is replaced now, it can be sold for $58000. Both the old equil traight-line depreciation with a zero salvage value for all of its assets. The net advantage (disadvantage) of replacing the old equipment with the new em O $58000 O $84800 O $(109000) O $(69000)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Question 15
Sheffield Corp. is considering the replacement of a piece of equipment with a newer model. The following data has been collected:
Purchase price
Accumulated depreciation
Annual operating costs
Old Equipment New Equipment
$212000
$352000
-0-
244000
O $(109000)
$(69000)
84800
244000
If the old equipment is replaced now, it can be sold for $58000. 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) of replacing the old equipment with the new equipment is
$58000
O$84800
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