(Solved):Johnson Enterprises uses a computer to handle sales invoices. Lately, business has been so good…

 

Question

Johnson Enterprises uses a computer to handle sales invoices. Lately, business has been so good that it takes an extra three hours per night, plus every third Saturday, to keep up with the volume of sales invoices. Management is considering updating its computer with a faster model that would eliminate all of the overtime processing.

Current Machine New Machine
Original purchase cost $15,000 $25,200
Accumulated depreciation $5,900
Estimated annual operating costs $25,000 $19,500
Remaining useful

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