Question: Down East Chemicals is considering replacing its existing computer system with a new computer system. The new system can offer considerable savings in computer processing

Down East Chemicals 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 $10,000 $15,000 Original cost $ 3.500 $ 2.000 Annual operating cost $ 6,000 Accumulated depreciation $ 4,000 Current salvage value of the existing system 5 years Remaining life in 5 years Salvage value in 5 years $ 2.000 $ 3.000 Annual depreciation Sunk costs include Sunk costs include: the original cost of the new system. the annual operating cost of the new system. the original cost of the existing system, the current salvage value of the existing system
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