Blossom Company has a factory machine with a book value of $166,000 and a remaining useful...

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Blossom Company has a factory machine with a book value of $166,000 and a remaining useful life of 5 years. A new machine is available at a cost of $253,000. This machine will have a 5-year useful life with no salvage value. The new machine will lower annual variable manufacturing costs from $595,000 to $497,000. Prepare an analysis that shows whether Blossom should retain or replace the old machine. (If an amount reduces the net income then enter with a negative sign preceding the number or parenthesis, e.g. -15,000, (15,000).) Net Income Replace Increase Keep Equipment Equipment (Decrease) Variable costs New machine cost Blossom Company has a factory machine with a book value of $166,000 and a remaining useful life of 5 years. A new machine is available at a cost of $253,000. This machine will have a 5-year useful life with no salvage value. The new machine will lower annual variable manufacturing costs from $595,000 to $497,000. Prepare an analysis that shows whether Blossom should retain or replace the old machine. (If an amount reduces the net income then enter with a negative sign preceding the number or parenthesis, e.g. -15,000, (15,000).) Net Income Replace Increase Keep Equipment Equipment (Decrease) Variable costs New machine cost

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Incremental analysis Keep equipment Re... View the full answer