Question: Coffee All the Time, LLC is trying to decide whether it should keep its existing industrial espresso machine or purchase a new one that works

Coffee All the Time, LLC is trying to decide whether it should keep its existing industrial espresso machine or purchase a new one that works more efficiently (which translate into cost savings) than the existing machine. Information on each machine follows:

-

Old machine

New machine

Original cost

$10,000

$25,000

Accumulated depreciation

6,000

0

Annual cash operating costs

9,500

5,000

Current salvage value of old toaster

2,500

-
Salvage value in 10 years

650

1,200

Remaining life

12 yrs.

12 yrs.

The incremental cost to purchase the new espresso machine is

Group of answer choices

$17,500.

$22,500.

$25,000.

$15,000.

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