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Exercise 10-10 Keep or replace LO P5 Xinhong Company is considering replacing one of its manufacturing machines. The machine has a book value of $41,000

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Exercise 10-10 Keep or replace LO P5 Xinhong Company is considering replacing one of its manufacturing machines. The machine has a book value of $41,000 and a remaining useful life of five years, at which time its salvage value will be zero. It has a current market value of $51,000. Variable manufacturing costs are $33,300 per year for this machine. Information on two alternative replacement machines follows. Alternative A $ 117, eee 22.ee $112.ee le.de Variable manufacturing costs per year Calculate the total change in net income if Alternative A, B is adopted. Should Xinhong keep or replace its manufacturing machine? If the machine should be replaced, which alternative new machine should Xinhong purchase? Complete this question by entering your answers in the tabs below. Alternative A Alternative B Al Xinhong Purchase should be indicated by a minus sign.) Calculate the total change in net income if Alternative A is adopted. (cash outflow ALTERNATIVE A: INCREASE OR (DECREASE) IN NET INCOME Cost to buy new machine Cash received to trade in old machine Reduction variable manufactung costs Total change in het income Alte B)

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