1. Dragoo Building Inc. has a crane with a book value of $257,000 and a 4-year remaining life. A new crane is available at a cost of $632,000. Dragoo can also receive $49,700 for trading in the old crane. The new crane will reduce variable costs by $148,200 per year over its four-year life. The total impact to Dragoo over the cranes four-year life is:

2. J&H Company has a router platform with a book value of $84,000 and a 3-year remaining life. A new router platform is available at a cost of $144,000, and J&H can also receive $17,900 for trading in the old router platform. The new router platform will reduce variable manufacturing costs by $32,900 per year over its three-year life. Should the router platform be replaced?

3. Based on a predicted level of production and sales of 29,000 units, a company anticipates total variable costs of $113,100, fixed costs of $52,200, and operating income of $47,030. Based on this information, the budgeted amount of variable costs for 27,000 units would be:

4.

Butler Corporation is considering the purchase of new equipment costing $66,000. The projected annual after-tax net income from the equipment is $2,400, after deducting $22,000 for depreciation. The revenue is to be received at the end of each year. The machine has a useful life of 3 years and no salvage value. Butler requires a 10% return on its investments. The present value of an annuity of $1 for different periods follows:

Periods	10%
1	0.9091
2	1.7355
3	2.4869
4	3.1699

What is the net present value of the machine?