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Author Question: Hartley's Meat Pies is considering replacing its existing delivery van with a new one. The new van ... (Read 160 times)

SGallaher96

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Hartley's Meat Pies is considering replacing its existing delivery van with a new one. The new van can offer considerable savings in operating costs. Information about the existing van and the new van follow:

Existing vanNew van
Original cost$56,000$95,000
Annual operating cost$22,500$15,000
Accumulated depreciation$33,000-
Current salvage value of the existing van$27,500-
Remaining life10 years10 years
Salvage value in 10 years$ 0$ 0
Annual depreciation$2,300$9,500

If Hartley's Meat Pies replaces the existing delivery van with the new one, over the next 10 years operating income will ________.
◦ decrease by $95,000
◦ increase by $75,000
◦ decrease by $75,000
◦ increase by $95,000


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Marked as best answer by SGallaher96 on Mar 6, 2021

Sarahjh

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