Question: CASE 4: Continue using or Replace? What is your choice? Why? Differential Analysis Continue with (Alternative 1) or Replace (Alternative 2) Old Machine November 28,

 CASE 4: Continue using or Replace? What is your choice? Why?

  1. CASE 4: Continue using or Replace? What is your choice? Why?

Differential Analysis

Continue with (Alternative 1) or Replace (Alternative 2) Old Machine

November 28, 2018

Continue with Old Machine (Alternative 1)

Replace Old Machine

(Alternative 2)

Differential Effects

(Alternative 2)

Revenues:

Proceed from selling the old

machine

Costs:

Purchase of New Machine

Variable Manufacturing Costs ( 5 years)

Profits (or Losses)

Assume that on November 28 of the current year, a business is considering replacing an old machine with a new machine

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