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Rory Company has a machine with a book value of $93.000 and a remaining five-year useful life. A new machine is available at
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Answer #1
Incremental Income From Replacing Machine
Cost of new machine -116,000
Reduction in variable manufacturing costs 80,000
Cash received from trade in of old machine 63,000
Incremental income ( incremental cost) $27,000
Should the machine be replaced? Yes

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