Oriole Company is considering the replacement of a piece of equipment with a newer model. The following data has been collected: Old Equipment New Equipment Purchase price $232000 $384000 Accumulated 92800 depreciation -0 Annual operating 307000 266000 costs if the old equipment is replaced now, it can be sold for $63400. Both the old equipment's remaining useful life and the new equipment's useful life is 5 years. The company uses straight-line depreciation with a zero salvage value for all of its assets. The net advantage (disadvantage) (net effect on current year net income) of replacing the old equipment with the new equipment is (don't consider annual operating costs in the computation) 0 $63400 $(13400) O $(75000) O $92800 In Sheridan Company's income statement, they report actual gross profit of $43500 and the following variances: $420 Materials price F Materials quantity 600F Labor price 420U 1000 Labor quantity F Overhead 900 F Sheridan would report gross profit at standard of O $44340 O $41000 O $37660 $38500 Splish Brothers Corp. has an 8% required rate of return. It's considering a project that would provide annual cost savings of $74000 for 5 years. The most that Johnson would be willing to spend on this project is Present Value of 1 at 8% Year 1 2 3 0.926 0.857 0.794 0.735 PV of an Annuity of 1 at 8% 0.926 1.783 2.577 3.312 3.993 5 0.681 $245088 O $186347 O $50394 $295482