Madison Optometry Is Considering the Purchase of a New Lens

question 37

Essay

Madison Optometry is considering the purchase of a new lens grinder to replace a machine that was purchased several years ago.Selected information on the two machines is given below:
$\begin{array}{|l|r|r|}\hline & \text { Old } & \text { New } \\\hline & \text { Machine } & \text { Machine } \\\hline \text { Original cost when new } & \$ 80,000&\$85,000 \\\hline \text { Accumulated depreciation to date } & 32,000 \\\hline \text { Current salvage value } & 26,000 \\\hline \text { Annual operating cost } & 4,000 & 3,000 \\\hline \text { Remaining useful life } & 4 \text { years } & 4 \text { years } \\\hline\end{array}$
Ignore income taxes and the time value of money in this problem.
Required:
Compute the total advantage or disadvantage of using the new machine instead of the old machine over the next four years.

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Definitions:

Service Stations

Facilities where motorists can refill their vehicle's fuel tank, and often also contains a convenience store or mechanic shop for minor repairs.

Water Contamination

The presence of harmful chemicals, pollutants, or pathogens in water, making it unsafe for consumption or use.

Bangladesh

A country located on the Bay of Bengal in South Asia, characterized by lush greenery and many waterways.

Dewatered Aquifers

Groundwater systems that have been significantly depleted or dried out, typically due to excessive water extraction.