Ch20 Q10/12

Pharoah Company has a machine that affixes labels to bottles. The machine has a book value of $72,000 and a remaining useful life of 3 years and no salvage value. A new, more efficient machine is available at a cost of $270,000 that will have a 3-year useful life with no salvage value. The new machine will lower annual variable production costs from $468,000 to $369,000. 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).) e Textbook and Media Save for Later Retain Equipment $ Replace Equipment $ $ Net Income Change Attempts: 0 of 6 used Submit Answer

Pharoah Compary has a machine that atfwes labels to bottles. The machine has a book value of $72,000 and a remaining useful life of 3 years and no salvage value. A new, more efficient inachine is avallable at a cost of $270,000 that will have a 3 -year usefullife with no salvage value. The new machine will lower annai variable production costs from $468,000 to $369,000. Prepare an analysis showing whether the old machine should be retained or replaced. (Enter negative amcunts using either o negative sign preceding the number es -45 or parentheses eg.(45))