Economic replacement analysis

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Reference no: EM13742002

A material handling system was purchased 3 years ago for $120,537. Two years ago it required substantial upgrading at a cost of $14,340. It once again is requiring an upgrading cost of $24,925. Alternately, a new system can be purchased today at a cost of $191,779, with a salvage value of $20,017. The existing machine could be sold today for $49,564. In an economic replacement analysis, what first cost should be assigned to the existing system?

Reference no: EM13742002

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