Rory Company has an old machine with a book value of $83,000 and a remaining five-year...
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Rory Company has an old machine with a book value of $83,000 and a remaining five-year useful life. Rory is considering purchasing a new machine at a price of $109,000 Rory can sell its old machine now for $89,000. The old machine has variable manufacturing costs of $38,000 per year. The new machine will reduce variable manufacturing costs by $15,200 per year over its five-year useful life (e) Prepare a keep or replace analysis of income effects for the machines (b) Should the old machine be replaced? Complete this question by entering your answers in the tabs below. Required A Required B Prepare a keep or replace analysis of income effects for the machines. Keep or Replace Analysis Keep Replace Income Increase (Decrease) if replaced Revenues Sale of existing machine 0 $ 89,000 Costs Purchase of new machine Vanable manufacturing costs $ 190,000 109,000 114,000 Income (loss) $ (190,000) (33,000) S (33,000) CATEGORCA Required B > Rory Company has an old machine with a book value of $83,000 and a remaining five-year useful life. Rory is considering purchasing a new machine at a price of $109,000 Rory can sell its old machine now for $89,000. The old machine has variable manufacturing costs of $38,000 per year. The new machine will reduce variable manufacturing costs by $15,200 per year over its five-year useful life (e) Prepare a keep or replace analysis of income effects for the machines (b) Should the old machine be replaced? Complete this question by entering your answers in the tabs below. Required A Required B Prepare a keep or replace analysis of income effects for the machines. Keep or Replace Analysis Keep Replace Income Increase (Decrease) if replaced Revenues Sale of existing machine 0 $ 89,000 Costs Purchase of new machine Vanable manufacturing costs $ 190,000 109,000 114,000 Income (loss) $ (190,000) (33,000) S (33,000) CATEGORCA Required B >
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