Johnson Enterprises 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.

Exercise 21-14 Johnson Enterprises uses a computer to handle its sales invoices. Lately, business has been so good that it takes an e Current Machine Original purchase cost $14,600 Accumulated deprecia $6,100 Estimated annual oper $24,700 Remaining useful life 5 years New Machine $25,300 _ $19,800 5 years If sold now, the current machine would have a salvage value of $11,500. If operated for the remainder of its useful l Should the current machine be replaced? (In the frst two columns, enter costs and expenses as positive amounts, a In the third column, enter net income increases as positive amounts and decreases as negative amounts. Enter nega Operating costs New machine cost Salvage value (old) Total Retain Machine Replace Machine $ $ Net Income Increase (Decrease) $ $ $ $ The current machine should be . increased/decreased 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 r the remainder of its useful life, the current machine would have zero salvage value. The new machine is expected to have zero salvage va penses as positive amounts, and any amounts received as negative amounts. negative amounts. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) sales invoices. Management is considering updating its computer with a faster model that would eliminate all of the overtime processing. ected to have zero salvage value after 5 years. entheses e.g. (45).) l of the overtime processing