Asset replacement decision
A machine purchased three years ago for $300,000 has a current book value using straight-line depreciation of $175,000; its operating expenses are $30,000 per year. A replacement machine would cost $240,000, have a useful life of nine years, and would require $13,000 per year in operating expenses. It has an expected salvage value of $57,000 after nine years. The current disposal value of the old machine is $70,000; if it is kept nine more years, its residual value would be $10,000.
Required
Based on this information, should the old machine be replaced? Support your answer.
We need at least 10 more requests to produce the solution.
0 / 10 have requested this problem solution
The more requests, the faster the answer.