Question
Brief Exercise 7-7 Bryant Company has a factory machine with a book value of $93,100 and a remaining useful life of 5 years. It can
Brief Exercise 7-7 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 $575,500. Prepare an analysis showing whether the old machine should be retained or replaced. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
retain equipment | replace equipment | net income increase (decrease) | |
variable manufacturing costs | |||
new machine cost | |||
sell old machine | |||
total |
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