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Question 3 A manager of a manufacturer is considering whether to keep or replace an old machine: Old Machine New Machine Original Cost $24,000 $10,000
Question 3 A manager of a manufacturer is considering whether to keep or replace an old machine: Old Machine New Machine Original Cost $24,000 $10,000 Accumulated Depreciation $ 9,000 not applicable - not yet acquired Useful Life 8 years 5 years Current Age 3 years O years Remaining useful life 5 years 5 years Current disposal value (FMV) $6,000 not applicable - not yet acquired Disposal value in 5 years $1,000 $0 Annual operating expenses $10,000 Ignore taxes and the net present value of money. Depreciation is straight-lined. REQUIRED: $8,000 Should they replace the old machine? Provide both a quantitative and qualitative assessment
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