Integrative Cases $2-85($Static$)$ Analyze the Impact of a Declsion on Income Statements $($LO $2-2)$

You were appointed the manager of Storage Solutions Section $(\backslash (\backslash$mathrm$\{$S$\}\_\{3\}\backslash ))$ at Milbank Technologles, a manufacturer of mobile computing parts and accessorles late last year. S$3$ manufactures a drive assembly for the company's most popular product. Your bonus is determined as a percentage of your division's operating profits before taxes.

One of your first major investment decisions was to invest $\backslash (\backslash$$ $2\backslash )$ million in automated testing equipment for device testing. The equipment was installed and in operation on January $1$ of this year.

This morning, the assistant manager of the division told you about an offer by Jollet Systems. Joliet wants to rent to S $3$ a new testing machine that could be Installed on December $31($only two weeks from now$)$ for an annual rental charge of $\backslash (\backslash$$ $460,000\backslash ).$ The new equipment would enable you to increase your division's annual revenue by $7$ percent. This new, more efficlent machine would also decrease fixed cash expenditures by $6$ percent.

Without the new machine, operating revenues and costs for the year are estimated to be as follows. Sales revenue and fixed and varlable operating costs are all cash.

If you rent the new testing equipment, S$3$ will have to write off the cost of the automated testing equipment this year because it has no salvage value. Equipment depreclation shown in the income statement is for this automated testing equipment. Equipment losses are included in the bonus and operating profit computation.

Because the new machine will be Installed on a company holiday, there will be no effect on operations from the changeover. Ignore any possible tax effects. Assume that the data given In your expected income statement are the actual amounts for this year and next year if the current equipment is kept.

Required:

a$.$ Assume the new testing equipment is rented and installed on December $31.$ What will be the impact on this year's divisional operating profit?

b$.$ Assume the new testing equipment is rented and installed on December $31.$ What will be the impact on next year's divisional operating profit?

c$.$ Would you rent the new equipment?

Complete this question by entering your answers in the tabs below.

Assume the new testing equipment is rented and installed on December $31.$ What will be the impact on this year's divisional operating profit? $($Enter your answers in dollars and not in millions $($i$.$e$.,2\mathrm{.}34$ million should be entered as $\backslash (2,340,000\backslash )).$ Operating loss amounts should be indicated with a minus sign.$)$ Please help me fill out the chart at the bottom of the question. I previously sent this to an expert but it was not clear how they got the answers and what went into the chart that needs to be filled out. I am very lost and not understanding this at all. I think an exact replica of the chart answers would be helpful with the calculations of how the answers were found for it please.