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please help got two of the answers is incorrect. Xinhong Company is considering replacing one of its manufacturing machines. The machine has a book value
please help got two of the answers is incorrect. Xinhong Company is considering replacing one of its manufacturing machines. The machine has a book value of $38,000 and a remaining useful life of 4 years, at which time its salvage value will be zero. It has a current market value of $48,000. Variable manufacturing costs are $33,500 per year for this machine. Information on two alternative replacement machines follows. Cost Variable manufacturing costs per year Alternative A $124, eee 22,700 Alternative B $110,000 11, eee 1. Calculate the total change in net income if Alternative A and B is adopted. 2. Should Xinhong keep or replace its manufacturing machine? If the machine should be replaced, which alternative new machine should Xinhong purchase? Answer is complete but not entirely correct. Calculate the total change in net income if Alternative A and B is adopted. (Cash outflows should be indicated by a minus sign.) INCREASE OR (DECREASE) IN NET INCOME ALTERNATIVE A: Cost to buy new machine S (124,000) Cash received to trade in old machine 48,000 Reduction in variable manufacturing costs 54,000 Total change in net income $ (22,000) ALTERNATIVE B: S (110,000) 48,000 112,500 50,500
please help got two of the answers is incorrect.
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