Waukee Railroad is considering the purchase of a powerful, high-speed wheel grinder to replace a standard wheel grinder that is now in use. Selected information on the two machines is given below:

Required
Prepare a computation covering the five-year period that will show the net advantage or disadvantage of purchasing the high-speed wheel grinder. Use only relevant costs in your analysis.

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Original cost new Accumulated depreciation to date Current salvage value Estimated cost per year to operate Remaining years of useful life Standard wheel grinder £20,000 6,000 9,000 15,000 5 years High-speed wheel grinder £30,000 7,000 5 years