NEED HELP WITH A-C PLSHomework Answers
| Part-a-1 | ||
| Keep Old Machine | Purchase New Machine | |
| Opportunity Cost | $230,000 | |
| Purchase Cost of new Machine | $250,000 | |
| Cost to Operate incurred (92000*4) (92000*0.75*4) | $368,000 | $276,000 |
| Total Avoidable cost | $598,000 | $526,000 |
| part a-2Yes Machine to be replaced |
| b. Income Statement with keeping Old machine | |||||
| 2019 | 2020 | 2021 | 2022 | Total | |
| Revenue | $220,000.00 | $220,000.00 | $220,000.00 | $220,000.00 | $880,000.00 |
| Depreciation Expense (450000/5) | $90,000.00 | $90,000.00 | $90,000.00 | $90,000.00 | $360,000.00 |
| Operating Expense | $92,000.00 | $92,000.00 | $92,000.00 | $92,000.00 | $368,000.00 |
| Ne Income (loss) | $38,000.00 | $38,000.00 | $38,000.00 | $38,000.00 | $152,000.00 |
| c Income Statement with replacing old machine | |||||
| 2015 | 2016 | 2017 | 2018 | Total | |
| Revenue | $220,000.00 | $220,000.00 | $220,000.00 | $220,000.00 | $880,000.00 |
| Depreciation Expense(250000/4) | $62,500.00 | $62,500.00 | $62,500.00 | $62,500.00 | $250,000.00 |
| Operating Expense (92000*0.75) | $69,000.00 | $69,000.00 | $69,000.00 | $69,000.00 | $276,000.00 |
| Ne Income (loss) | $88,500.00 | $88,500.00 | $88,500.00 | $88,500.00 | $354,000.00 |
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NEED HELP WITH A-C PLS
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