Question: Dragoo Building incorporated has a pump with a book value of $254,000 and a four-year remaining life. A new pump is available at a cost
Dragoo Building incorporated has a pump with a book value of $254,000 and a four-year remaining life. A new pump is available at a cost of $629,000. Dragoo can recelve $49,400 for trading in the old pump. The old pump has variable costs of $324,000 per year. The new pump will reduce variable costs by $147,500 per year over its four-year ife. The total impact to Dragoo Building incorporated over the pump's four-year life is: Multiple Chaice Increase of $10,400, increase of $590000 Decrease of $10,400 Decrease of $620.000 Decrease of 549,400
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