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pduvin pduvin
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6 years ago
EIF Manufacturing company needs to overhaul its drill press or buy a new one. The facts have been gathered, and are as follows:
   Current    New
   machine          
Purchase price, new   $80,000   $100,000
Current book value   30,000
Overhaul needed now    40,000
Annual cash operating costs    70,000    40,000
Current salvage value   20,000
Salvage value in five years    5,000   20,000

Required:
Based on present value analysis, which alternative is the most desirable with a current required rate of return of 20 percent? Show computations, ignore tax effect.
Textbook 
Cost Accounting: A Managerial Emphasis, Canadian Edition

Cost Accounting: A Managerial Emphasis, Canadian Edition


Edition: 7th
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btpsandbtpsand
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6 years ago
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pduvin Author
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6 years ago
Thanks
TheMoffattMan
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Yesterday
Correct Slight Smile TY
rileyjones420
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2 hours ago
Good timing, thanks!
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