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PR 25-2A Differential analysis for machine replacement proposal OBJ. 1 Lexigraphic Printing Company is considering replacing a machine that has been used in its factory
PR 25-2A Differential analysis for machine replacement proposal OBJ. 1 Lexigraphic Printing Company is considering replacing a machine that has been used in its factory for four years. Relevant data associated with the operations of the old machine and the new machine, neither of which has any estimated residual value, are as follows: Old Machine $89,000 Cost of machine, 10-year life 8,900 Annual depreciation (straight-line 23,600 Annual manufacturing costs, excluding depreciation 6,100 Annual nonmanufacturing operating expenses 74,200 Annual revenue 29,700 Current estimated selling price of machine New Machine $119,700 Purchase price of machine, six-year life 19,950 Annual depreciation (straight-line) 6,900 Estimated annual manufacturing costs, excluding depreciation (Continued)
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