PART A $-$ Lopez Company is considering replacing one of its old manufacturing machines. The old machine

has a book value of $$46,000$ and a remaining useful life of four years. It can be sold now for

$$56,000.$ Variable manufacturing costs are $$49,000$ per year for this old machine. Information on two

alternative replacement machines follows. The expected useful life of each replacement machine is

four years.

$($a$)$ Compute the income increase or decrease from replacing the old machine with Machine A$.$

$($b$)$ Compute the income increase or decrease from replacing the old machine with Machine B$.$

$($c$)$ Should Lopez keep or replace its old machine?

$($d$)$ If the machine should be replaced, which new machine should Lopez purchase?

Complete this question by entering your answers in the tabs below.

Compute the income increase or decrease from replacing the old machine with Machine A$.$

Note: Amounts to be deducted should be indicated with a minus sign.Lopez Company is considering replacing one of its old manufacturing machines. The old machine has a book value of $$46,000$ and a remaining useful life of four years. It can be sold now for $$56,000.$ Variable manufacturing costs are $$49,000$ per year for this old machine. Information on two alternative replacement machines follows. The expected useful life of each replacement machine is four years.

Machine A Machine B

Purchase price $ $122,000$ $ $134,000$

Variable manufacturing costs per year $20,00013,000$

$($a$)$ Compute the income increase or decrease from replacing the old machine with Machine A$.$

$($b$)$ Compute the income increase or decrease from replacing the old machine with Machine B$.$

$($c$)$ Should Lopez keep or replace its old machine?

$($d$)$ If the machine should be replaced, which new machine should Lopez purchase?