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santosh plastics

santosh plastics Inc. purchased a new machine one year ago

Santosh Plastics Inc. purchased a new machine one year ago at a cost of $69,000. Although the machine more years of operating life, the president of Santosh Plastics is wondering if the company should replace machine that has just come on the market. The new machine costs $103,500 and is expected to slash the current annual operating costs of $48,300 machine is expected to last for five years, with zero salvage value at the end of five years. The current mac if the company decides to buy the new machine. The company uses straight-line depreciation. 1:48:27 In trying to decide whether to purchase the new machine, the president has prepared the following analysis ook Book value of the old machine Less: Salvage value Net loss from disposal $57,500 11,500 $46,000 "Even though the new machine looks good," said the president, "we can't get rid of that old machine if it mea it. We'll have to use the old machine for at least a few more years." Sales are expected to be $241,500 per year, and selling and administrative expenses are expected to be $14 regardless of which machine is used. Required: 1. Prepare a comparative income statement covering the next five years, assuming: a. The new machine is not purchased. Santosh Plastics Inc. purchased a new machine one year ago at a cost of $69,000. Although the machine more years of operating life, the president of Santosh Plastics is wondering if the company should replace machine that has just come on the market. The new machine costs $103,500 and is expected to slash the current annual operating costs of $48,300 machine is expected to last for five years, with zero salvage value at the end of five years. The current mac if the company decides to buy the new machine. The company uses straight-line depreciation. 1:48:27 In trying to decide whether to purchase the new machine, the president has prepared the following analysis ook Book value of the old machine Less: Salvage value Net loss from disposal $57,500 11,500 $46,000 "Even though the new machine looks good," said the president, "we can't get rid of that old machine if it mea it. We'll have to use the old machine for at least a few more years." Sales are expected to be $241,500 per year, and selling and administrative expenses are expected to be $14 regardless of which machine is used. Required: 1. Prepare a comparative income statement covering the next five years, assuming: a. The new machine is not purchased