How much new capital must be supplied to make the purchase

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A piece of equipment originally costing $40,000 was put into use 12 years ago. At the time the equipment was put into use, the service life was estimated to be 20 years and the salvage and scrap value at the end of the service life were assumed to be zero. On this basis, a straight-line depreciation fund. was set up. The equipment can now be sold for $10,000, and a more advanced model can be installed for $55,000. Assuming the depreciation fund is available for use, how much new capital must be supplied to make the purchase?

Reference no: EM131061565

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