Exercise 25-10 (Algo) Keep or replace Lopez Company is considering replacing one of its old manufacturing machines. The old machine has a book value of $46,000 and a remaining useful life of five years. It can be sold now for $56,000. Variable manufacturing costs are $49,000 per year for this old machine. Information on two alternative replacement machines follows. The expected useful life of each replacement machine is five years Machine A Machine B Purchase price $ 116,000 $ 128,000 Variable manufacturing costs per year 19,000 12,000 (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) the machine should be replaced, which new machine should Lopez purchase? Complete this question by entering your answers in the tabs below. RGA Reg Reqc and D Compute the income increase or decrease from replacing the old machine with Machine A. (Amounts to be deducted should be indicated with a minus sign.) Koop Replace Income Increase (Decrease) from Replacing Machine A: Keep or Replace Analysis Revenues Sale of existing machine Costs Purchase of new machine Variable manufacturing costs Income foss) $ 0 $ os Req> Exercise 25-10 (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 $46,000 and a remaining useful life of five years. It can be sold now for $56,000. Variable manufacturing costs are $49,000 per year for this old machine Information on two alternative replacement machines follows. The expected useful life of each replacement machine is five years. Machine A Machine B Purchase price $ 116,000 $ 128,000 Variable manufacturing costs per year 19,00 12,000 (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) of the machine should be replaced, which new machine should Lopez purchase? Complete this question by entering your answers in the tabs below. Rega ReqB Reg Cand D Compute the income increase or decrease from replacing the old machine with Machine B. (Amounts to be deducted should be indicated with a minus sign.) Income Increase Machine B: Keep or Replace Analysis Keep Replace (Decrease) from Replacing Revenues Sale of existing machine Costs Purchase of new machine Variable manufacturing costs Income (oss) $ 0 0 0 Exercise 25-10 (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 $46,000 and a remaining useful life of five years. It can be sold now for $56,000. Variable manufacturing costs are $49,000 per year for this old machine. Information on two alternative replacement machines follows. The expected useful life of each replacement machine is five years. Machine A Machine B Purchase price $ 116,000 $ 128,000 Variable manufacturing costs per year 19,000 12,000 (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? Complete this question by entering your answers in the tabs below. inces Reg A Req Reg C and D (c) 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 now machine should Lopez purchase?
