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hi there, i need help with this. i fyou could explain you ranswer to help me understand id greatly appreciate it. thanks Use incremental analysis
hi there, i need help with this. i fyou could explain you ranswer to help me understand id greatly appreciate it. thanks
Use incremental analysis for retaining o replacing E7-13 On January 2, 2016, Twilight Hospital purchased a $100,000 special radiology scanner from Bella Inc. The scanner had a useful life of 4 no disposal value at the end of its useful life. The straight-line method of depreciation is used on this scanner. Annual operating costs with this scanner are $105,000. years and was estimated to have (LO 5), E Approximately one year later, the hospital is approached by Dyno Technology salesper- son, Jacob Cullen, who indicated that purchasing the scanner in 2016 from Bella Inc. was a mistake. He points out that Dyno has a scanner that will save Twilight Hospital $25,000 a year in operating expenses over its 3-year useful life. Jacob notes that the new scanner will cost $110,000 and has the same capabilities as the scanner purchased last year: The hospital agrees that both scanners are of equal quality. The new scanner will have no disposal value. Jacob agrees to buy the old scanner from Twilight Hospital for $50,000. Instructions (a) If Twilight Hospital sells its old scanner on January 2, 2017, compute the gain or loss on the sale. (b) Using incremental analysis, determine if Twilight Hospital should purchase the new scanner on January 2, 2017 (c) Explain why Twilight Hospital might be reluctant to purchase the new scanner, regard- less of the results indicated by the incremental analysis in (b)Step by Step Solution
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