1. incremental cash outflow = new machine cost - sale value of old machine = 150000-100000 = 50000
9:03 PM Q Aas Verizon ih : Required: Construct the text of an e-mail to Sara...
CI Judgment Case 5-5 (Static) Replacement decision (LO5-3, 5-8] Hughes Corporation is considering replacing a machine used in the manufacturing process with a new, more efficient model. The purchase price of the new machine is $150,000 and the old machine can be sold for $100,000. Output for the two machines is identical; they will both be used to produce the same amount of product for five years. However, the annual operating costs of the old machine are $18,000 compared to...
please answer all questions
correctly. Thank You
Svahn, AB, is a Swedish manufacturer of sailing yachts. The company has assembled the information shown below that pertains to two independent decision-making contexts. Case A: The company chronically has no idle capacity and the old Model B100 machine is the company's constraint. Management is considering purchasing a Model B300 machine to use in addition to the company's present Model B100 machine. The old Model B100 machine will continue to be used to...
1. differential analysis for a lease or sell
decision
2. differential analysis for a discontinued product
3. make or buy decision
4. Machine replacement decision
5. sell or process further
Differential Analysis for a Lease-or-Sell Decision Inman Construction Company is considering selling excess machinery with a book value of $278,600 (original cost of $399,400 less accumulated depreciation of $120,800) for $274,600, less a 5% brokerage commission. Alternatively, the machinery can be leased to another company for a total of $283,300...
Because of its inability to control film and personnel
costs in its radiology department, Sanger General Hospital wants to
replace its existing picture archive and communication (PAC) system
with a newer version. The existing system, which has a current book
value of $2,250,000, was purchased three years ago for $3,600,000
and is being depreciated on a straight-line basis over an
eight-year life to a salvage value of $0. This system could be sold
for $800,000 today. The new PAC system...