Replace Equipment
A machine with a book value of $247,600 has an estimated six-year life. A proposal is offered to sell the old machine for $214,200 and replace it with a new machine at a cost of $283,700. The new machine has a six-year life with no residual value. The new machine would reduce annual direct labor costs from $50,300 to $40,200.
a. Prepare a differential analysis dated April 11 on whether to continue with the old machine (Alternative 1) or replace the old machine (Alternative 2). If an amount is zero, enter "0". Use a minus sign to indicate subtracted or negative numbers or a loss.
Differential Analysis | |||
Continue with Old Machine (Alt. 1) or Replace Old Machine (Alt. 2) | |||
April 11 | |||
Continue with Old Machine (Alternative 1) | Replace Old Machine (Alternative 2) | Differential Effect on Income (Alternative 2) | |
Revenues: | |||
Proceeds from sale of old machine | $ | $ | $ |
Costs: | |||
Purchase price | |||
Direct labor (6 years) | |||
Income (Loss) | $ | $ | $ |
b. Should the company continue with the old
machine (Alternative 1) or replace the old machine (Alternative
2)?
We need at least 10 more requests to produce the answer.
0 / 10 have requested this problem solution
The more requests, the faster the answer.
Replace Equipment A machine with a book value of $247,600 has an estimated six-year life. A...
Replace Equipment A machine with a book value of $247,000 has an estimated six-year life. A proposal is offered to sell the old machine for $216,500 and replace it with a new machine at a cost of $282,000. The new machine has a six-year life with no residual value. The new machine would reduce annual direct labor costs from $50,400 to $40,300. a. Prepare a differential analysis dated April 11 on whether to continue with the old machine (Alternative 1)...
Replace Equipment A machine with a book value of $245,200 has an estimated six-year life. A proposal is offered to sell the old machine for $217,500 and replace it with a new machine at a cost of $281,100. The new machine has a six-year life with no residual value. The new machine would reduce annual direct labor costs from $49,400 to $39,500. a. Prepare a differential analysis dated April 11 on whether to continue with the old machine (Alternative 1)...
Replace Equipment A machine with a book value of $248,800 has an estimated six-year life. A proposal is offered to sell the old machine for $217,000 and replace it with a new machine at a cost of $280,700. The new machine has a six-year life with no residual value. The new machine would reduce annual direct labor costs from $50,600 to $40,500. Prepare a differential analysis dated October 3 on whether to continue with the old machine (Alternative 1) or...
Replace Equipment A machine with a book value of $250,900 has an estimated six-year life. A proposal is offered to sell the old machine for $214,100 and replace it with a new machine at a cost of $282,000. The new machine has a six-year life with no residual value. The new machine would reduce annual direct labor costs from $50,600 to $40,500. Prepare a differential analysis dated October 3 on whether to continue with the old machine (Alternative 1) or...
Replace Equipment A machine with a book value of $245,200 has an estimated six-year life. A proposal is offered to sell the old machine for $216,500 and replace it with a new machine at a cost of $283,800. The new machine has a six-year life with no residual value. The new machine would reduce annual direct labor costs from $49,400 to $39,500. Prepare a differential analysis dated October 3 on whether to continue with the old machine (Alternative 1) or...
Replace Equipment A machine with a book value of $246,700 has an estimated six-year life. A proposal is offered to sell the old machine for $214,200 and replace it with a new machine at a cost of $283,200. The new machine has a six-year life with no residual value. The new machine would reduce annual direct labor costs from $50,800 to $40,600. Prepare a differential analysis dated February 18, on whether to continue with the old machine (Alternative 1) or...
Replace Equipment A machine with a book value of $80,000 has an estimated five-year life. A proposal is offered to sell the old machine for $50,500 and replace it with a new machine at a cost of $75,000. The new machine has a five-year life with no residual value. The new machine would reduce annual direct labor costs from $11,200 to $7,400. a. Prepare a differential analysis dated April 11 on whether to continue with the old machine (Alternative 1)...
1. Replace Equipment A machine with a book value of $245,800 has an estimated six-year life. A proposal is offered to sell the old machine for $215,000 and replace it with a new machine at a cost of $282,800. The new machine has a six-year life with no residual value. The new machine would reduce annual direct labor costs from $50,900 to $40,700. Prepare a differential analysis dated October 3 on whether to continue with the old machine (Alternative 1)...
A machine with a book value of $121,730 has an estimated six-year life. A proposal is offered to sell the old machine for $87,800 and replace it with a new machine at a cost of $169,280. The new machine has a six-year life with no residual value. The new machine would reduce annual direct labor costs from $56,950 to $41,400. Required: 1. Prepare a differential analysis dated February 18 on whether to continue with the old machine (Alternative 1) or...
A company is considering replacing an old piece of machinery, which cost $602,500 and has $347,800 of accumulated depreciation to date, with a new machine that has a purchase price of $486,900. The old machine could be sold for $63,500. The annual variable production costs associated with the old machine are estimated to be $157,400 per year for eight years. The annual variable production costs for the new machine are estimated to be $99,900 per year for eight years. a....