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as led Detiler to consider either upgrading or teplacing be producton equpment The followieg twole presents dala for the foo alternatives Required 1. Stould Debler

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as led Detiler to consider either upgrading or teplacing be producton equpment The followieg twole presents dala for the foo alternatives Required 1. Stould Debler upgrade its production ine of replace in? Show your calcuibtions 2. Now, suppose the one time equipment cont to replace the production equipment is semienthat nepotatie All other data are as gven prevousiy What is the manmarm one time cquprent cost that Debiler would bo wiling to pay to teplace the old equpenent rather thw upgrade it? 3. Assume that the captal expendbures to replace and ipgrade the production equgiment are as gven in the erginal exerise but that the production and sabs quantess we not kiown For what production and salet quanties would Debler (o) upy ade the oqupment or (D) requace the equpment? 4. Assume that al divin are as given in the coignal exercise Dan Dona is Doblers menaget. a yeat his current behus is frs prmary concern. Which aternative woudd Dora choose? Explain. Data table have incame wews and the tere value of inceny isegative cost) Detike Cempany srousis the equpment When coenparing welevant cosis between the choices, reptacreg ele equipmen is. then the cost to ipprinde that Debier would to ming to gay to replacin the old oqupeient rather than upgrade in? Deblet wocka be wiling io pary up is 1 Debler would want to upgrade if ene production and sales quantify wis loss than units for the three yeats Use the taties below to comipute the operiating income for oach of the cetions Firs yoar optrating incinen is alurnative, iven thicugy (5) sees in roguriment 1, the The Deibler Company produces and sells 5,000 modular computer desks per year at a selling price of $475 each. Its current production equipment, purchased for $1,700,000 and with a five-year useful life, is only two years old. It has a terminal disposal value of $0 and is depreciated on a straight-line basis. The equipment has a current disposal price of $525,000. However, the emergence of a new moulding technology has led Deibler to consider either upgrading or replacing the production equipment. The following table presents data for the two alternatives (Click icon to view the data) Required Requirement 1. Should Deibler upgrade its production line or replace it? Show your calculations. (Only complete the necessary answer boxes. Leave unused cells blank. Use parentheses or a minus sign for a negative cost.) Deibler Company should the equipment When comparing relevant costs between the choices, replacing the equipment is than the cost to upgrade. Requirement 2. Now, suppose the one-time equipment cost to replace the production equipment is somewhat negotiable. All other data are as given previously. What is the maximum one-time equipment cost that Deibler would Data table 1. Should Deibler upgrade its production line or replace it? Show your calculations. 2. Now, suppose the one-time equipment cost to replace the production equipment is somewhat negotiable. All other data are as given previously. What is the maximum one-time equipment cost that Deibler would be willing to pay to replace the old equipment rather than upgrade it? 3. Assume that the capital expenditures to replace and upgrade the production equipment are as given in the original exercise but that the production and sales quantities are not known. For what production and sales quantities would Deibler (a) upgrade the equipment or (b) replace the equipment? 4. Assume that all data are as given in the original exercise. Dan Doria is Deibler's manager, and his bonus is based on operating income. Because he is likely to relocate after about a year, his current bonus is his primary concern. Which alternative would Doria choose? Explain. be willing to pay to replace the old equipment rather than upgrade it? Deibler would be willing to pay up to $ Requirement 3. Assume that the capital expenditures to replace and upgrade the production equipment are as given in the original exercise but that the production and sales quantity is not known. For what production and sales quantity would Deibler (a) upgrade the equipment or (b) replace the equipment? (Round your answer to the nearesi Whole number.) Deibler would want to upgrade if the production and sales quantity was less than units for the three years. Requirement 4. Assume that all data are as given in the original exercise. Dan Doria is Deibler's manager, and his bonus is based on operating income. Because he is likely to relocate after about a year, his current bonus is his primary concern. Which alternative would Doria choose? Explain. (Round your answers to the nearest whole dollar Do not leave any cells blank) Use the table below to compute the operating income for each of the options. First-year operating income is by $ under the upgrade alternative, and Dan Doria, with his one-year horizon and operating income-based bonus, will choose the alternative, even though, as seen in requirement 1 , the alternative is better in the long run for Deibler. This exercise illustrates the possible conflict between the decision model and the performance evaluation model. The Deibler Company produces and sells 5,000 modular computer desks per year at a selling price of $475 each. its current production equipment, purchased for $1,700,000 and with a five-year useful life, is only fwo years old it has a terminal disposal value of $0 and is depreciated on a straight-line basis The equipment has a current disposal price of $525,000. However, the emergence of a new moulding technology has led Deibler to consider either upgrading or replacing the production equipment. The following table presents data for the two alternatives Requirement 1. Should Deibler upgrade its production line or replace it? Show your calculations. (Only complete the necessary answer boxes Leave unused cells blank. Use parentheses or a minus sign for a negative cost) Deibler Company should the equipment. When comparing relevant costs between the choices, replacing the equipment is than the cost to upgrade. Requirement 2. Now, suppose the one-time equipment cost to replace the production equipment is somewhat negotiable. All other data are as given previousiy What is the maximum one-time equipment cost that Deibler would be willing to pay to roplace the old equipment rather than upgrade it? Deibler would be willing to pay up tos Requirement 3. Assume that the capital expendtures to replace and upgrade the production equipment are as given in the original exercise but that the production and sales quantity is not known For what production and sales quantity would Debler (a) upgrade the equipment or (b) replace the equipment? (Round your answer to the nearest whole number ) Deabler would want to upgrade if the production and sales quantity was less than unis for the three yoars Requirement 4. Assume that al data are as given in the original exercise Dan Doria is Deibler's manager, and his bonus is based on operating income Because he is likely to relocate after about a year, his current bonus is his primary concem. Which altornative would Doria choose? Explain. (Round your answers to the noarest whole dollar. Do not leave any cesis blank) Use the table below to compute the operating income for each of the options Festyear operating income is bonus will choose the by 5 under the upgrade altemative, and Dan Doria, with his one-year horizon and operating income-based aiternative, even though, as seen in requirement 1 , the. exircise ilisstrates the possbie conflict between the decision model and the performance evaluation model 2. Now, suppose the one-time equipment cost to replace the production equipment is somewhat negotiable. All other data are as given previously. What is the maximum one-time equipment cost that Deibler would be willing to pay to replace the old equipment rather than upgrade it? 3. Assume that the capital expenditures to replace and upgrade the production equipment are as given in the original exercise but that the production and sales quantities are not known. For what production and sales quantities would Deibler (a) upgrade the equipment or (b) replace the equipment? 4. Assume that all data are as given in the original exercise. Dan Doria is Deibler's manager, and his bonus is based on operating income. Because he is likely to relocate after about a year, his current bonus is his primary concern. Which alternative would Doria choose? Explain. Data table ignore income taxes and the time value of money

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