Machine Replacement Decision A company is considering replacing an old piece of machinery, which cost $400,000 and has $175,000

Question

2 years ago

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Machine Replacement Decision A company is considering replacing an old piece of machinery, which cost $400,000 and has $175,000

of accumulated depreciation to date, with a new machine that has a purchase price of $550,000. The old machine could be sold for $250,000. The annual variable production costs associated with the old machine are estimated to be $72,500 per year for eight years. The annual variable production costs for the new machine are estimated to be $24,000 per year for eight years. a.1 Prepare a differential analysis dated May 29 to determine whether to continue with (Alternative 1) or replace (Alternative 2) the old machine. If an amount is zero, enter "0". If required, use a minus sign to indicate a loss.

Business

1 answer:

jenyasd209 [6] · Answer 1 · 2022-09-27T19:02:57+03:00

jenyasd209 [6]2 years ago

6 0

Answer:

Decision : It would be better to Replace Old Machine

Explanation:

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