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please. Answer it with Excel. i need answer in excel. LO 1, 2,4 3-36 Relevant and sunk costs McKinnon Company's plant manager is considering buying
please. Answer it with Excel. i need answer in excel.
LO 1, 2,4 3-36 Relevant and sunk costs McKinnon Company's plant manager is considering buying a new grinding machine to replace an old grinding machine or overhauling the old one to ensure compliance with the plant's high-quality standards. The following data are available: OLD GRINDING MACHINE Original cost $60,000 Accumulated depreciation 48,000 Annual operating costs 20,000 Current salvage value Salvage value at the end of 5 years NEW GRINDING MACHINE Cost $60,000 Annual operating costs 8,000 Salvage value at the end of 5 years 1,000 OVERHAUL OF OLD GRINDING MACHINE Cost of overhaul $35,000 Annual operating costs after overhaul 13,000 Salvage value at the end of 5 years 5000 6,000 Required (a) List all relevant costs and when they are incurred. (b) What costs should the decision maker consider as sunk costs? (c) What should the plant manager do? WhyStep by Step Solution
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