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Machine replacement decision Distruction Labels and Amount Descriptions Differential Analysis V IHI Instructions A company is considering replacing an old piece of machinery, which cost
Machine replacement decision Distruction Labels and Amount Descriptions Differential Analysis V IHI Instructions A company is considering replacing an old piece of machinery, which cost $605,400 and has $367,000 of accumulated depreciation to date, with a new machine that has a purchase price of $578,650. The old machine could be sold for $250,300, The annual variable production costs associated with the old machine are estimated to be $61,800 per year for eight years. The annual variable production costs for the new machine aro estimated to be $17,950 per year for eight years, Required: a Prepare a diferential analysis dated September 13 to determine whether to continue with (Alternative 1) or replace (Alternative 2) the old machine. Refer to the Ists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or negative numbers use a minus sign. If there is no amount or an amount is zero, enter "0". A colon () will automatically appear if required. b. Determine whether the company should continue with (Alternative 1) or replace (Alternative 2) the old machine. c. What is the sunk cost in this situation? Differential Analysis |||||||||||||||||||| | | | | | UVUVINIU WU W WII U V Wwwwwww automatically appear if required, Differential Analysis Continue with (Alternative. 1) or Replace (Alternative. 2) Old Machine September 13 Continue with Replace Old Old Machine Machine (Alternative 1) (Alternative 2) Differential Effect on Income (Alternative 2) 2 3 (Labely 4 5 (label) 6 7
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