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navik [9.2K]
3 years ago
6

Granfield Company has a piece of manufacturing equipment with a book value of $44,000 and a remaining useful life of four years.

At the end of the four years the equipment will have a zero salvage value. The market value of the equipment is currently $22,800. Granfield can purchase a new machine for $128,000 and receive $22,800 in return for trading in its old machine. The new machine will reduce variable manufacturing costs by $19,800 per year over the four-year life of the new machine. The total increase or decrease in net income by replacing the current machine with the new machine (ignoring the time value of money) is:
Business
1 answer:
Troyanec [42]3 years ago
6 0

Answer:

$26,000

Explanation:

The calculation of Net increase or decrease in income on replacement is shown below:-

Net savings in Variable cost for 4 years = Variable manufacturing costs × Life

= $19,800 × 4

= $79,200

Net Investment to be made in New machine = Initial investment of new machine - Traded in value of old machine

= $128,000 - $22,800

= $105,200

Net financial disadvantage of replacement = Net savings in Variable cost for 4 years - Net Investment to be made in New machine

= $79,200 - $105,200

= $26,000

So, for computing the net financial disadvantage of replacement we simply applied the above formula.

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Governments at the federal, state and local levels enact laws that influence consumer behavior in all of the following ways, exc
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All of the following ways that consumer behavior is influenced by laws that are passed by federal, state, and municipal governments, with the exception of, providing incentives to purchase specific brands over others.

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5 0
1 year ago
Use goal seek to answer this question. All else equals, to have a net income of 20,000, the COGS margin percentage must be _____
Lelechka [254]

Answer:

Use goal seek to answer this question. All else equals, to have a net income of 20,000, the COGS margin percentage must be <u>40%</u>, and the gross profit must be <u>$17,250</u>.

Explanation:

The income statement is missing, so I looked it up and the information given was:

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  • COGS 40,000
  • Gross Profit 60,000
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Since COGS are$40,000 and total sales are $100,000, the COGS margin percentage = 40,000 / 100,000 = 40%

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4 0
3 years ago
Gilberto Company currently manufactures 65,000 units per year of one of its crucial parts. Variable costs are $1.95 per unit, fi
pashok25 [27]

Answer:

Explanation:

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Unavoidable fixed cost=               62,000

Total cost of manufacturing =      263,750.

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Unavoidable fixed cost =               62,000

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Gilberto should manufacture in - house instead of buying.

4 0
3 years ago
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vitfil [10]

Answer:

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4 0
3 years ago
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