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Data table All equipment costs will continue to be depreciated on a straight-line basis. For simplicity, ignore income taxes and the time value of money.
Data table All equipment costs will continue to be depreciated on a straight-line basis. For simplicity, ignore income taxes and the time value of money. Requirements 1. Should TechTeach 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 TechTeach would be willing to pay to replace rather than upgrade the old equipment? 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 TechTeach (a) upgrade the equipment or (b) replace the equipment? 4. Assume that all data are as given in the original exercise. Dan Doria is TechTeach'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. production equipment. The following table presents data for the two alternatives: (Click to view the data for the two alternatives.) Read the requirements. Requirement 1. Should TechTeach upgrade its production line or replace it? Show your calculations. Determine the total relevant costs over 3 years. (If an input field is not used in the table, leave the input field empty; do not enter a zero. Use parentheses or a minus sign for numbers to be subtracted.) Over 3 years
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