Total savings from using new machine
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(Ignore taxes and the time value of money in this problem.) Harrison Architects is considering the purchase of a new special laser printer to replace the old printer the company uses to make construction blueprints. Selected information on the two machines is given below:
Old Machine New Machine
Original cost when new $13,000 $15,000
Accumulated depreciation to date $ 4,000
Current salvage value $ 6,000
Annual operating cost $ 7,000 3,000
Remaining useful life 4 years 4 years
The total savings from using the new machine instead of the old machine over the next four years would be:
a. $18,000
b. $19,000
c. $15,000
d. $ 7,000
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Solution Summary
The solution explains how to calculate the total savings from using new machine instead of the old machine.
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The savings from the new machine per year = 7,000-3,000=4,000 per ...
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