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Johnson cnterprises uses a computer to handle its sales invoices. Lately, business has been so good that it takes an extra 3 hours per night,
Johnson cnterprises uses a computer to handle its sales invoices. Lately, business has been so good that it takes an extra 3 hours per night, plus every third Saturday, to keep up with the volume of sales invoices. Management is considering updating its computer with a faster model that would eliminate all of the overtime processing New Machine $25,300 Original purchase cost Accumulated depreciation Estimated annual operating costs Remaining useful life Current Machine $14.500 $5,500 $24.800 5 years $19,700 5 years If sold now, the current machine would have a salvage value of $9,800. If operated for the remainder of its useful life, the current machine would have zero salvage value. The new machine is expected to have zero salvage value after 5 years Prepare an incremental analysis to determine whether the current machine should be replaced. (In the first two columns, enter costs and expenses as positive amounts, and any amounts received as negative amounts. In the third column, enter net income increases as positive amounts and decreases as negative amounts. Enter negative amounts using either a negative sign preceding the number eg 45 or parentheses eg (45)) Net Income Increase (Decrease) Retain Maching Replace Machine $ 90500 5 25500 Operating costs $ 124000 O 3.85/5 Question 3 of 5 WE WOUTE bavage van CVS PELO Vezer vase vacy Prepare an incremental analysis to determine whether the current machine should be replaced. (In the first two columns, enter costs and expenses as positive amounts, and any amounts received as negative amounts. In the third column, enter net income increases as positive amounts and decreases as negative amounts. Enter negative amounts using either a negative sign preceding the number eg. 45 or parentheses eg. (45).) Retain Machine Replace Machine Net Income Increase (Decrease) 25500 S 98500 Operating costs 124000 i i 25300 i New machine cost 24800 9000 9800 Salvage value (old) s 15700 $ Total $ 124000 108300 The current machine should be replaced Assistance Used e Textbook and Media Attempts: 2 of 5 used Submit Answer Save:forcator
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