Chapter 25 - Homework eBook Show Me How Learning Objective 1 1. EX.25.02.ALGO A company is considering replacing an old piece of machinery, which cost $600,600 and has $351,300 of accumulated depreciation to date, with a new machine that has a purchase price of $486,500. The old machine could be sold for 2. EX.25.06 $61,300. The annual variable production costs associated with the old machine are estimated to be $157,600 per year for 8 years. The annual variable production costs for the new machine are estimated to be $100,000 per year for 8 years. 3. EX.25.07.ALGO a.1 Prepare a differential analysis dated December 10 to determine whether to continue with (Alternative 1) or replace (Alternative 2) the old machine. If an amount is zero, enter "0". If required, use a minus sign to indicate a loss. 4. EX.25.09.ALGO Differential Analysis Continue with (Alt. 1) or Replace (Alt. 2) Old Machine 5. EX.25.11.ALGO December 10 Continue with 6. EX.25.21.ALGO Line Item Description Old Machine Replace Old Machine Differential Effects Alternative 1) (Alternative 2) (Alternative 2) 7. PR.25.01A Revenues: Proceeds from sale of old machine 8. MAD.25.02 Costs: Purchase price Variable productions costs (8 years Profit (loss) a.2 Determine whether to continue with (Alternative 1) or replace (Alternative 2) the old machine. b. What is the sunk cost in this situation? The sunk cost is $ Check My Work 3 more Check My Work uses remaining. Progress: 4/8 items Previous Next Assignment Score: 8.59% All work saved. Save and Exit Submit Assignment for Grading