# In Problem 4, suppose that you just discovered that the production engineers had slipped up twice in their statement of the relevant facts concerning the potential purchase of the new machine: The engineers failed to note that in addition to the \$60,000 invoice price for the new machine, \$2,000 must be paid for installation. The current salvage value of the

In Problem 4, suppose that you just discovered that the production engineers had slipped up twice in their statement of the relevant facts concerning the potential purchase of the new machine:
• The engineers failed to note that in addition to the \$60,000 invoice price for the new machine, \$2,000 must be paid for installation.
• The current salvage value of the old machine is not \$8,000, but rather only \$3,000. On the basis of this new information, what are the relevant cash flows for this replacement problem? Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...