Question: Machine Replacement Decision A company is considering replacing an old plece of machinery, which cost $599,300 and has 5349,900 or accumulated depreciation to date, with
Machine Replacement Decision A company is considering replacing an old plece of machinery, which cost $599,300 and has 5349,900 or accumulated depreciation to date, with a new machine that has a purchase price of $486,700. The old machine could be sold for $64,900. The annual variable production costs associated with the old machine are estimated to be 1155,700 per year for eight years. The annual variable production costs for the new machine are estimated to be $100,100 per year for eight years. 2.1 Prepare a differential analysis dated September 13, to determine whether to continue with (Alternative 1) or replace (Alternative 2) the old machine. If an amount is zero, enter". For those boxes in which you must enter subtracted or negative numbers use a minus sign Differential Analysis Continue with Old Machine (AIL. 1) or Replace Old Machine (Alt. 2) September 13 Continue with Old Machine (Alternative :) Replace Old Machine (Alternative 2) Differential Effect on Income (Alternative >> venues Proceeds from all of old machine Costs Purchase price Vartable productions couts (years) Income (L) 4.2 Determine whether to continue with (Alternativet) or replace (Alternative 2) the old machine 5. What is the sun cost in this situation? The sun is the
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