Question
Enterprise A is currently considering scrapping a machine with a useful life of 5 years and replacing it with another more efficient machine. Since the
Enterprise A is currently considering scrapping a machine with a useful life of 5 years and replacing it with another more efficient machine. Since the old machine has no market value, it is out of the question to sell it after scrapping. It has been determined that the new machine, which can be used for 5 years, will lead to a reduction of TL 25,000 in annual fixed expenses and reduce the total fixed cost to TL 160,000. It is estimated that if the new machine is purchased, the unit variable cost will increase from 8TL to 10TL. The sales volume of the business, which is currently 40,000 units, is not expected to change in the next five years. The unit sales price of the product is 14TL. In case of using the old and new machine; Calculate the profit, profit margin, contribution margin, contribution ratio, breakeven point sales amount and amount and evaluate the appropriateness of the purchase decision.
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