Marco Manufacturing has a stamping machine that originally cost $20,000 and still has one year of depreciation remaining to be charged on the machine. This machine creates an annual return of $10,000 in the production process and costs $6000 annually to maintain. A new machine can be purchased for $30,000 and would be depreciated over ten years with straight-line depreciation of $3000 annually. The annual return for the replacement machine would be $15,000 with annual maintenance costs of $3000. 

Should Marco replace the stamping machine?

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To determine whether Marco should replace the stamping machine we need to compare the costs and bene... View the full answer