Question
Current Attempt in Progress The law firm of Matadin and Howe relies heavily on a colour laser printer to process the paperwork. Recently the printer
Current Attempt in Progress The law firm of Matadin and Howe relies heavily on a colour laser printer to process the paperwork. Recently the printer has not functioned well and print jobs were not being processed. Management is considering updating the printer with a faster model. Current Printer New Model Original purchase cost Accumulated depreciation $30,200 $25,400 18,800 Estimated operating costs (annual) 3,000 2,000 Useful life 4 years 4 years If sold now, the current printer would have a salvage value of $4,500. If operated for the remainder of its useful life, the current printer would have zero salvage value. The new printer is expected to have zero salvage value after 4 years. Prepare an analysis to show whether the company should retain or replace the printer. (If an amount reduces the net income then enter with a negative sign preceding the number, e.g. -15,000 or parenthesis, e.g. (15,000).) Period of 4 years $ Variable costs Salvage value New machine cost $ Keep Printer The company should the printer. $ Replace Printer $ $ $ Net Income Increase (Decrease)
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