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PLEASE DO ALL REQUIREMENTS The Techliet Company produces and sells 6.400 modular compuiter desks per year at a selting price of 5700 each. Ias current
PLEASE DO ALL REQUIREMENTS
The Techliet Company produces and sells 6.400 modular compuiter desks per year at a selting price of 5700 each. Ias current production equipment, perchased for $1,950,000 and with a 5 year useful ife, ia only 2 yoars old, it has a terminal disposal value of $0 and is depreciated on a straight Ine basis. The equipment has a cument disposal price of $400,000. However, the emerpence of a new molding technology has led Techiet to conaider wither upgrading or replacing the grodoction equipment. The following table presents data for the two allematives: iClick to view the dika for the teo atematives ) Read the rogurements Requirement 1. Should TechNot upgrade its production line or replace it? Show your calculationt. Debermine the total relevant costs cver 3 years. If an ingut seld is not ised in the table, lesve the inguit feid emtoty; do not enter a tero Ute parentheset or a minus sign for nurbbers to be sutiracind ) Requirements 1. Should TechNet upgrade its production line or replace it? Shew your calculasions 2. Now suppose the one-tme equipment cost to replace the production equigment is somewhat negolable. Al other data are as given prevously. What is the maximum one Aime equigment oost that TechNot would be willing to poy to replace rather than upgrade the old equpment? 3. Assurn thet the caphal expendiures to replace end upgrade the producbon equipment are as ghen in the original exercise, but that the production and sales quantity is not known. For what production and sbles quanty would TechNet (a) upgrade the equicment or (b) replace the equaprient? 4. Assume that all data ane as oimen in the original exercise. Dan Doria is TechNet's managec, and his bonus is based on operating income. Because he is lhely to relocalt affer atout a year, his eurrent bonus is his primacy conceen. Which alkernative would Doria choose? Explain. Data table Step by Step Solution
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