Question: Replacement problem when old machine has a positive book value. Assume the same facts as in Problem 2.3 except that the new machine will have

Replacement problem when old machine has a positive book value. Assume the same facts as in Problem 2.3 except that the new machine will have a of $12,000. Assume further that the old machine has a book value of $40,000, with a remaining life of eight years. If replaced, the old machine can, at present, be sold for $15,000. Should the machine replacement be made?

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