Exercise 10-10 (Algo) Keep or replace LO P5 Lopez Company is considering replacing one of its old manufacturing machines. The old machine has a book value of $48,000 and a remaining useful life of five years. It can be sold now for $58,000. Variable manufacturing costs are $47,000 per year for this old machine. Information on two alternative replacement machines follows. The expected useful life of each replacement machine is five years. Purchase price Variable manufacturing costs per year) Machine A $124,000 22,000 Machine B $139,000 15,000 (e) Compute the income increase or decrease from replacing the old machine with Machine A. (b) Compute the income increase or decrease from replacing the old machine with Machine B (c) Should Lopez keep or replace its old machine? (d) if the machine should be replaced, which new machine should Lopez purchase? Answer is not complete. Complete this question by entering your answers in the tabs below. Req A Req B Req C and D Compute the income increase or decrease from replacing the old machine with Machine A. Note: Amounts to be deducted should be indicated with a minus sign. Machine A: Keep or Replace Keep Replace Analysis Income Increase (Decrease) from Replacing Revenues Sale of existing machine $ 005 58,000 Costs Purchase of new machine : S 00 117,000 O Variable manufacturing costs 230,000 O 95,000 Income (loss) 230,000 $270.000 500,000 6 points Purchase price Variable manufacturing costs per year Machine A $124,000 22,000 Machine 8 $139,000 15,000 (a) Compute the income increase or decrease from replacing the old machine with Machine A. (b) Compute the income increase or decrease from replacing the old machine with Machine B. (c) Should Lopez keep or replace its old machine? (d) If the machine should be replaced, which new machine should Lopez purchase? Answer is not complete. Complete this question by entering your answers in the tabs below. Req A Req B Req C and D Machine B: Keep or Replace Analysis Compute the income increase or decrease from replacing the old machine with Machine B. Note: Amounts to be deducted should be indicated with a minus sign. Keep Replace Income Increase (Decrease) from Replacing Revenues Sale of existing machine Costs Purchase of new machine Variable manufacturing costs Income (loss) $ 0 15 its Lopez Company is considering replacing one of its old manufacturing machines. The old machine has a book value of $48,0 remaining useful life of five years. It can be sold now for $58,000. Variable manufacturing costs are $47,000 per year for this machine. Information on two alternative replacement machines follows. The expected useful life of each replacement mach years. Mc Graw Purchase price Variable manufacturing costs per year Machine A Machine B $ 124,000 22,000 $ 139,000 15,000 (a) Compute the income increase or decrease from replacing the old machine with Machine A. (b) Compute the income increase or decrease from replacing the old machine with Machine B. (c) Should Lopez keep or replace its old machine? (d) If the machine should be replaced, which new machine should Lopez purchase? Answer is not complete. Complete this question by entering your answers in the tabs below. Req A Req B Req C and D (e) Should Lopez keep or replace its old machine? (d) If the machine should be replaced, which new machine should Lopez purchase? (c) Should Lopez keep or replace its old machine? (d) Which new machine should Lopez purchase? < Req B Req Canil >