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Business, 03.05.2021 19:20 alex7881

Johnson Enterprises uses a computer to handle its sales invoices. Lately, business has been so good that it takes an extra 3 hours per night, plus every third Saturday, to keep up with the volume of sales invoices. Management is considering updating its computer with a faster model that would eliminate all of the overtime processing. Current MachineNew Machine Original purchase cost$14,800$25,200 Accumulated depreciation$7,000_ Estimated annual operating costs$24,700$20,000 Remaining useful life5 years5 years If sold now, the current machine would have a salvage value of $11,800. If operated for the remainder of its useful life, the current machine would have zero salvage value. The new machine is expected to have zero salvage value after 5 years. Prepare an incremental analysis to determine whether the current machine should be replaced.

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