Marine Industrial Coatings, Inc. is considering replacing its existing computer system with a new computer system. The
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Marine Industrial Coatings, Inc. is considering replacing its existing computer system with a new computer system. The new system can offer considerable savings in computer processing and inventory management costs. Information about the existing system and the new system follow:
Existing Computer | New Computer | |
Original cost | $10,000 | $15,000 |
Annual operating cost | $3,500 | $2,000 |
Current salvage value of the existing system | $4,000 | --- |
Remaining life in 5 years | 5 years | 5 years |
Salvage value in 5 years | $0 | $0 |
Should Marine Industrial Coatings replace the existing computer system with the new system? What are the cash flow savings or additional cost over the 5 years? Ignore income taxes.
Related Book For
Financial Reporting Financial Statement Analysis and Valuation a strategic perspective
ISBN: 978-1337614689
9th edition
Authors: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
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