Question: Teck Lock Corp. is considering replacing an old drill press with a new model. The following data is available: Old Machine New Machine Price $300,000

Teck Lock Corp. is considering replacing an old drill press with a new model. The following data is available:

Old Machine New Machine

Price $300,000 $600,000

Accumulated Depreciation 90,000 -0-

Remaining useful life 10 years -0-

Useful life -0- 10 years

Annual operating costs $240,000 $180,600


If the new machine is purchased, the company could get $24,000 by selling the old machine.


What is the net increase or decrease in income if the new model is purchased?



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