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Answer the Following Questions Using the Information Below:
Indium Services

Question 16

Multiple Choice

Answer the following questions using the information below:
Indium Services, Inc., is considering replacing a machine. The following data are available:
 Replacement  Old Machine  Machine  Ori ginal cost $630,000$490,000 Useful life in years 105 Current age in years 50 Book value $350,000− Disposal value now $112,000− Disposal value in 5 years 00 Antual cash operating costs $98,000$56,000\begin{array}{l}\begin{array} { l r r } &&\text { Replacement }\\& \text { Old Machine } & \text { Machine } \\\text { Ori ginal cost } & \$ 630,000 & \$ 490,000 \\\text { Useful life in years } & 10 & 5 \\\text { Current age in years } & 5 & 0 \\\text { Book value } & \$ 350,000 & - \\\text { Disposal value now } & \$ 112,000 & - \\\text { Disposal value in } 5 \text { years } & 0 & 0 \\\text { Antual cash operating costs } & \$ 98,000 & \$ 56,000\end{array}\end{array}
-The difference between keeping the old machine and replacing the old machine is ________.


A) $518,000 in favor of keeping the old machine
B) $168,000 in favor of keeping the old machine
C) $518,000 in favor of replacing the old machine
D) $168,000 in favor of replacing the old machine

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