7 Exercise 23-12 Keep or replace LO A1 0.5 points Xinhong Company is considering replacing one of its manufacturing machines. The machine has a book value of $35,000 and a remaining useful life of 5 years, at which time its salvage value will be zero. It has a current market value of $45,000. Variable manufacturing costs are $33,200 per year for this machine. Information on two alternative replacement machines follows. Alternative A $124,000 23,000 Cost Variable manufacturing costs per year Alternative B $114,000 11,000 eBook Hint Calculate the total change in net income if Alternative A, B is adopted. Should Xinhong keep or replace its manufacturing machine? If the machine should be replaced, which alternative new machine should Xinhong purchase? Complete this question by entering your answers in the tabs below. Ask Alternative A Alternative B Xinhong Purchase Print Calculate the total change in net income if Alternative A is adopted. (Cash outflows should be indicated by a minus sign.) References ALTERNATIVE A: INCREASE OR (DECREASE) IN NET INCOME Cost to buy new machine Cash received to trade in old machine Reduction in variable manufacturing costs Total change in net income (Alternative A Alternative B > 7 Exercise 23-12 Keep or replace LO A1 0.5 points Xinhong Company is considering replacing one of its manufacturing machines. The machine has a book value of $35,000 and a remaining useful life of 5 years, at which time its salvage value will be zero. It has a current market value of $45,000. Variable manufacturing costs are $33,200 per year for this machine. Information on two alternative replacement machines follows. Alternative A $124,000 23,000 Cost Variable manufacturing costs per year Alternative B $114,000 11,000 eBook Hint Calculate the total change in net income if Alternative A, B is adopted. Should Xinhong keep or replace its manufacturing machine? If the machine should be replaced, which alternative new machine should Xinhong purchase? Ask Complete this question by entering your answers in the tabs below. Alternative A Alternative B Xinhong Purchase Print Calculate the total change in net income if Alternative B is adopted. (Cash outflows should be indicated by a minus sign.) References ALTERNATIVE B: INCREASE OR (DECREASE) IN NET INCOME Cost to buy new machine Cash received to trade in old machine Reduction in variable manufacturing costs Total change in net income 7 Exercise 23-12 Keep or replace LO A1 0.5 points Xinhong Company is considering replacing one of its manufacturing machines. The machine has a book value of $35,000 and a remaining useful life of 5 years, at which time its salvage value will be zero. It has a current market value of $45,000. Variable manufacturing costs are $33,200 per year for this machine. Information on two alternative replacement machines follows. Alternative A $ 124,000 23,000 Cost Variable manufacturing costs per year Alternative B $114,000 11,000 eBook ot Hint Calculate the total change in net income if Alternative A, B is adopted. Should Xinhong keep or replace its manufacturing machine? If the machine should be replaced, which alternative new machine should Xinhong purchase? Ask Complete this question by entering your answers in the tabs below. Alternative A Alternative B Xinhong Purchase Print Should Xinhong keep or replace its manufacturing machine? If the machine should be replaced, which alternative new machine should Xinhong purchase? References Which option should Xinhong choose?
