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Benson Co. is considering disposing of a machine with a book value of $12,500 and estimated remaining life of five years. The old machine can be sold for $1,500. A new high-speed machine can be purchased at a cost of $25,000. It will have a useful life of five years and no residual value. It is estimated that variable manufacturing costs will be reduced from $26,000 to $23,500 if the new machine is purchased. The total net differential increase or decrease in cost for the new equipment for the entire five years is: Answer decrease of $11,000 decrease of $15,000 increase of $11,000 increase of $15,000

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9985894

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