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Instructions Labels and Amount Descriptions Differential Analysis Final Question Instructions Lexigraphic Printing Company is
New Machine $119,840 Purchase price of machine, six-year life Annual depreciation (straight-line) 20,095 Estimated annual man
Labels and Amount Descriptions Differential Analysis April 30 Continue with Old Machine (Alternative 1) Replace Old Machine (
Labels and Amount Descriptions Labels Cash flows from investing activities Costs Revenues Amount Descriptions Annual manufact
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Answer #1

Solution:

Differential Analysis
Continue with Old Machine (Alt. 1) or Replace Old Machine (Alt. 2)
8-Nov
Particulars Continue with Old Machine (Alternative 1) Replace Old Machine (Alternative 2) Differential Effect on Income (Alternative 2)
Revenues
Proceeds from sale of old machine $0.00 $29,835.00 $29,835.00
Costs
Purchase price $0.00 $119,840.00 $119,840.00
Annual manufacturing costs (6 yrs.) $142,260.00 $41,520.00 -$100,740.00
Income (Loss) -$142,260.00 -$131,525.00 $10,735.00
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