Question
1. Ridha Co plans to replace an existing machine and must choose between two machines. Machine 1 has an initial cost of OMR 200,000 and
1. Ridha Co plans to replace an existing machine and must choose between two machines. Machine 1 has an initial cost of OMR 200,000 and will have a scrap value of OMR 25,000 after four years. Additional maintenance cost of machine 1 is OMR 20,0000 Machine 2 has an initial cost of OMR 225,000 and will have a scrap value of OMR 50,000 after three years. Additional maintenance cost of machine 1 is OMR 25,0000. Ridha Co. can sell the existing machine for OMR 45,000
Annual earnings of the two machines are as follows:
Year
1
2
3
4
Machine 1 (OMR per year)
75,000
65,000
50,000
45,000
Machine 2 (OMR per year)
85,000
70,000
55,000
Machine 2 has an initial cost of OMR 225,000 and will have a scrap value of OMR 50,000 after three years. Additional maintenance cost of machine 1 is OMR 25,0000. Ridha Co. can sell the existing machine for OMR 45,000
Annual earnings of the two machines are as follows:
Year | 1 | 2 | 3 | 4 |
Machine 1 (OMR per year) | 75,000 | 65,000 | 50,000 | 45,000 |
Machine 2 (OMR per year) | 85,000 | 70,000 | 55,000 |
|
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Connect For Data Analytics For Accounting
Authors: Author
2nd Edition
1264152000, 9781264152001
