Make the presidents replacement economically advantageous

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Reference no: EM13937966

In 2006, Violet Rose Computer Corporation purchased a new quality inspection system for $550,000. The estimated salvage value was $50,000 after 10 years. Currently the expected remaining life is 7 years with an AOC of $27,000 per year and an estimated salvage value of $40,000. The new president has recommended early replacement of the system with one that costs $400,000 and has a 12 year economic service life, a $35,000 salvage value, and a estimated AOC of $50,000 per year, find the minimum trade in value necessary now to make the presidents replacement economically advantageous.

Reference no: EM13937966

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