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tensa zangetsu [6.8K]
3 years ago
13

Bryant Company has a factory machine with a book value of $93,100 and a remaining useful life of 5 years. It can be sold for $27

,200. A new machine is available at a cost of $430,400. This machine will have a 5-year useful life with no salvage value. The new machine will lower annual variable manufacturing costs from $592,600 to $505,500. Prepare an analysis showing whether the old machine should be retained or replaced.
Business
1 answer:
NISA [10]3 years ago
6 0

Answer:

The old machine should be replaced.

Explanation:

Note: See the attached excel file for the the analysis showing whether the old machine should be retained or replaced.

From the attached excel file, the following calculation are made:

Variable Manufacturing cost of Retain = Initial Variable Manufacturing cost * remaining useful life of old machine = $592,600 * 5 = $2,963,000

Variable Manufacturing cost of Replace = New Variable Manufacturing cost * Remaining useful life of new machine = $505,500 * 5 = $2,527,500

From the attached excel, it can be observed that the total cost of Retain is $32,200 higher than the total cost of Replace. This therefore implies that the old machine should be replaced.

Download xlsx
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Answer:

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3 years ago
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Regal Financial Institution specializes in home loans. What type of financial institution is it? savings and loan bank credit un
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4 years ago
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Jim's Hardware is adding a new product to its sales lineup. Initially, the firm will stock $36,000 of the new inventory, which w
mr_godi [17]

Answer:

$13,000

Explanation:

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3 years ago
"___________________ are key to completing a full risk management plan, since the tolerances will determine which hazards may be
Margaret [11]

Answer:

Stakeholder's Tolerance Level.

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