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Concordia Inc manufactures parts for aircrafts repairs. It sells their parts to all I major airline in Canada. In addition to that. Concordia Inc is
Concordia Inc manufactures parts for aircrafts repairs. It sells their parts to all I major airline in Canada. In addition to that. Concordia Inc is expanding its sales to other countries such as the US and Mexico. Concordia Inc is deciding whether to keep the current manufacturing equipment or buy a new one. The operation manager provides you with the following details: HE Equipment Existing alignment Original cost I 18.00:! I I 20,000 I Useful life (years) I B 8 Age . - 2 Accumulated I I depreciation Not applicable 5.000 Book value I Not applicable I 15,000 I Current disposal value (in cash} I Not applicable ' ' 3,000 I Salvage value (end of useful life} ' 5.000 0 Cash operating cost Current disposal value (in cash) ' Not applicable ' ' 3,000 ' I Salvage value I I I I (end of useful life) ' 5,000 ' I o Cash operating cost I I I I per year) I 20,000 I 23,000 I Concordia Inc usoe straight-line depreciation method. Ignore time value of matey and income taxes. Should Concordia Inc replace the existing I equipment? Explain with calculation. I I (8 marks) l
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