Question: Joyce Printers, Inc., is considering replacing its current printing machines with? newer, faster, and more efficient printing technology. The following data have been? compiled: Category
Joyce Printers, Inc., is considering replacing its current printing machines with? newer, faster, and more efficient printing technology. The following data have been? compiled:
| Category | Existing Machines | New machines |
| Original Cost | $80,000 | $120,000 |
| Anual Operationg Cost | $50,000 | $30,000 |
| Remaining Useful Life | 5 years | 5 years |
| Salvage Value after 5 years | $5,000 | $10,000 |
The existing machines can be disposed of now for $40,000. Keeping them will cost $ $20,000 for repair and upgrading.
Requirement
Should Joyce Printers keep the existing printing? machines? Explain.
Begin by completing the following analysis of the total relevant costs of purchasing the new machine over upgrading the existing machine:
| Adquisition cost of new machine | $----------------- |
| Saving in cost of repair and upgrading | $----------------- |
| Salvage value of new machine | $----------------- |
| Salvage value of existing machine | $----------------- |
| Chage in operation cost over 5 years | $----------------- |
| Annual operation cost | $----------------- |
| Original cost of existing machine | $----------------- |
| Disposal value of existing machine | $----------------- |
| COMULATIVE CASH SAVINGS ( ADDITIONAL COST) | $----------------- |
Should Joyce Printers keep the existing printer machines? Explain.
Based on the above analysis the joyce printer should------------------------------ . Because-------------------------------------.
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