Gull Corp.is considering selling its old popcorn machine and replacing it with a newer one.The old machine has a book value of $5,000 and its remaining useful life is 5 years.Annual costs are $4,000.A high school is willing to buy it for $2,000.New equipment would cost $18,000 with annual operating costs of $1,500.The new machine has an estimated useful life of 5 years.

Should the machine be replaced?

Question

Gull Corp.is considering selling its old popcorn machine and replacing it with a newer one.The old machine has a book value of $5,000 and its remaining useful life is 5 years.Annual costs are $4,000.A high school is willing to buy it for $2,000.New equipment would cost $18,000 with annual operating costs of $1,500.The new machine has an estimated useful life of 5 years.
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Should the machine be replaced?

Quizplus · Accepted Answer

The Answer of Gull Corp.is considering selling its old popcorn machine and replacing it with a newer one.The old machine has a book value of $5,000 and its remaining useful life is 5 years.Annual costs are $4,000.A high school is willing to buy it for $2,000.New equipment would cost $18,000 with annual operating costs of $1,500.The new machine has an estimated useful life of 5 years.
​
Should the machine be replaced?

Gull CorpIs Considering Selling Its Old Popcorn Machine and Replacing It