The machine has a book value

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Xinhong Company is considering replacing one of its manufacturing machines. The machine has a book value of $ 45,000 and a remaining useful life of 5 years, at which time its salvage value will be zero. It has a current market value of $ 52,000. Variable manufacturing costs are $ 36,000 per year for this machine. Information on two alternative replacement machines follows. Should Xinhong keep or replace its manufacturing machine?

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If the machine should be replaced, which alternative new machine should Xinhongpurchase? 

 

Reference no: EM13906202

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