Management accounting question

C login willememail College Itt bowl Dich Kumar Outlook Modul - C @ ezto.mheducation.com/hm.Ipx Question 1 (of 8) > 1. value 10.00 points Muri Plastics Inc. purchased a new machine one year ago at a cost of $45,000. Although the machine operates well, the president of Muri Plastics is wondering if the company should replace it with a new electronic machine that has just come on the market. The new machine would slash annual operating costs by two-thirds, as shown in the comparative data below: Present Proposed Machine New Machine Purchase cost new $45,000 $67,500 Estimated useful life new 6 years 5 years Annual operating costs $31,500 $10,500 Annual straight-line depreciation 7,500 13,500 Remaining book value 37,500 Salvage value now 7,500 Salvage value in five years 0 0 In trying to decide whether to purchase the new machine, the president has prepared the following analysis. Book value of the old machine $37,500 Less: Salvage value 7,500 Net loss from disposal $30,000 "Even though the new machine looks good," said the president, "we can't get rid of that old machine if it means taking a huge loss on it. We'll have to use the old machine for at least a few more years. Sales are expected to be $157,500 per year, and selling and administrative expenses are expected to be $94,500 per year, regardless of which machine is used Required: 1. Prepare a summary income statement covering the next five years, assuming the following Type here to search O 9 DELL F1 F2 F3 F4 F5 F6 F7 F8 F9 144 DDI # $ % K 2 B 4 5 E 6 7 8 Q W E R T Y U A S D F G H J OOO Samsung Triple Camera Shot with my Galaxy A50 V B N) Grades - 20M -Contempor. Orge x C Login with Centennial College Ett X Mail - Dinesh Kumar . Outlook x Module 10 -7 C ezto.mheducation.com/hm.tpx Required: 1. Prepare a summary income statement covering the next five years, assuming the following a. The new machine is not purchased. b. The new machine is purchased. (Leave no cells blank - be certain to enter "0" wherever required.) 6 Years Summary Keep Old Buy New Machine Machine Difference Total expenses 2. Compute the net advantage of purchasing the new product using relevant costs. of purchasing the new machine Type here to search O Hi 9 DELL F1 F2 F3 F4 F5 F6 F7 F8 FO F1 # $ % A & 2 3 4 5 E 7 8 OOOW E R T Y U Samsung Triple Camera AShot with my Galaxy A50 F G H J