Flowers For Everyone is considering replacing its existing delivery van with a new one. The new van
Question:
Flowers For Everyone is considering replacing its existing delivery van with a new one. The new van can offer considerable savings in operating costs. Information about the existing van and the new van follow:
Existing van New van
Original cost$100,000 $180,000
Annual operating cost$35,000 $20,000
Accumulated depreciation$60,000
Current salvage value of the existing van$45,000
Remaining life10 years10 years
Salvage value in 10 years$0$0
Annual depreciation$4,000$ 18,000
If Flowers For Everyone replaces the existing delivery van with the new one, over the next 10 years income will:
How do you do problem? It says the answer is increase 15000 but I have no idea how to get to that
Management Accounting Information for Decision-Making and Strategy Execution
ISBN: 978-0137024971
6th Edition
Authors: Anthony A. Atkinson, Robert S. Kaplan, Ella Mae Matsumura, S. Mark Young