ezto.mheducation.com + G M Question 5 - Chapter 25 Quiz - Connect Google MepeBoyNK Course Hero Chapter 25 Quiz Saved Help Save & Exit Submit 5 A company is considering replacing one of its old manufacturing machines. The old machine has a book value of $47,000 and a remaining useful life of five years. It can be sold now for $57,000. Variable manufacturing costs are $48,000 per year for this old machine. Information on two alternative replacement machines follows. The expected useful life of each replacement machine is five years. 8 Machine A Machine B 00:30:23 Purchase price 116, 000 131, 000 Variable manufacturing costs 14, 000 per year 22, 000 (a) Compute the income increase or decrease from replacing the old machine with Machine A. (b) Compute the income increase or decrease from replacing the old machine with Machine B. (c) Should the company keep or replace its old machine? (d) If the machine should be replaced, which new machine should the company purchase? Complete this question by entering your answers in the tabs below. Req A Req B Req C and D Compute the income increase or decrease from replacing the old machine with Machine A. Note: Amounts to be deducted should be indicated with a minus sign. Income Machine A: Keep or Replace Replace Increase Analysis Keep (Decrease) from Replacing Revenues Sale of existing machine Costs Purchase of new machine Variable manufacturing costs Income (loss)