2024 – Xinhong Company is considering replacing one of its manufacturing machines The machine has a book value
Xinhong Company is considering replacing one of its manufacturing machines. The machine has a book value of $38,000 and a… – 2024
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Xinhong Company is considering replacing one of its manufacturing machines. The machine has a book value of $38,000 and a remaining useful life of 5 years, at which time its salvage value will be zero. It has a current market value of $48,000. Variable manufacturing costs are $33,000 per year for this machine. Information on two alternative replacement machines follows. |
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Alternative A |
Alternative B |
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Cost |
$ |
117,000 |
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$ |
117,000 |
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Variable manufacturing costs per year |
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22,100 |
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10,500 |
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Calculate the total change in net income if Alternative A is adopted. (Cash outflows should be indicated by a minus sign.) |
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