Question
Old machine original cost $120,000 Old machine book value $ 90,000 Old machine present disposal value $ 42,000 New machine cost $140,000 Estimated remaining life
| Old machine original cost | $120,000 |
| Old machine book value | $ 90,000 |
| Old machine present disposal value | $ 42,000 |
| New machine cost | $140,000 |
| Estimated remaining life of each machine | 10 years |
| Expected salvage value of each machine at end of estimated life | $ 15,000 |
| Expected annual sales with new machine | $178,000 |
| Expected annual sales with old machine | $173,000 |
| Expected annual variable operating costs with old machine | $149,000 |
| Expected annual variable operating costs with new machine | $130,000
|
Assume purchase of new machine and disposal of the old machine.
What is the incremental profit for the 10-year period?
Assume the estimated salvage value of the old machine (only) at the end of 10 years is $3,000.
All other figures remain the same. Assume purchase of new machine and disposal of old.
What is the incremental profit for the 10-year period?
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Introduction To AccountingAn Integrated Approach
Authors: Penne Ainsworth, Dan Deines
8th Edition
1119600103, 9781119600107
