Check my work 1 Exercise 10-10 Keep or replace LO P5 8 points Xinhong Company is considering replacing one of its manufacturing machines. The machine has a book value of $40,000 and a remaining useful life of four years, at which time its salvage value will be zero. It has a current market value of $50,000. Variable manufacturing costs are $33,500 per year for this machine. Information on two alternative replacement machines follows. eBook Cost Variable manufacturing costs per year Alternative A $119,000 22,700 Alternative B $113,000 10,400 Hint Calculate the total change in net income if Alternative A, B is adopted. Should Xinhong keep or replace its manufacturing machine? If the machine should be replaced, which alternative new machine should Xinhong purchase? Ask Complete this question by entering your answers in the tabs below. Print Xinhong Alternative A Alternative B Purchase References Calculate the total change in net income if Alternative A is adopted. (Cash outflows should be indicated by ALTERNATIVE A: INCREASE OR (DECREASE) IN NET INCOME Cost to buy new machine $ 113,000 Cash received to trade in old machine 50,000 Reduction in variable manufacturing costs 44,800 Total change in net income $ 207,800 Alternative A Alternative B Check my work 1 Exercise 10-10 Keep or replace LO P5 8 points Xinhong Company is considering replacing one of its manufacturing machines. The machine has a book value of $40,000 and a remaining useful life of four years, at which time its salvage value will be zero. It has a current market value of $50,000. Variable manufacturing costs are $33,500 per year for this machine. Information on two alternative replacement machines follows. eBook Cost Variable manufacturing costs per year Alternative A $119,000 22,700 Alternative B $113,000 10,400 Hint Calculate the total change in net income if Alternative A, B is adopted. Should Xinhong keep or replace its manufacturing machine? If the machine should be replaced, which alternative new machine should Xinhong purchase? Ask Complete this question by entering your answers in the tabs below. Print Alternative A Alternative B Xinhong Purchase References Calculate the total change in net income if Alternative B is adopted. (Cash outflows should be indicated by ALTERNATIVE B: INCREASE OR (DECREASE) IN NET INCOME Cost to buy new machine Cash received to trade in old machine Reduction in variable manufacturing costs Total change in net income $ 0