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Digital Components assembles circuit boards by using a manually operated machine. The original cost of the machine is $60,000, the accumulated depreciation is $24,000. It's
Digital Components assembles circuit boards by using a manually operated machine. The original cost of the machine is $60,000, the accumulated depreciation is $24,000. It's remaining useful life is five years, and its residual value is negligible. In 2017 a proposal was made to replace the present manufacturing procedure with a fully automatic machine that will cost $180,000. The new machine has an estimated useful life of 5 years and no residual value. For use in evaluating the proposal, the accountant accumulated the following annual data Present Operations Proposed Operation 205.000 $72,000 51.000 5000 1,500 45.000 174500 $205,000 $72.000 Sales Direct Materials Direct Labor Power & Maint Taxes 18,000 Selling & Admin expenses Total Expenses 45,000 $139.000 Using the differential analysis what is the total income or loss ifithe old machine was replaced
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