Question Help E11-33 (similar to) The TechTe ch Company produces and sells 5 800 modular computer des per year at a seling price of 5600 each s current production equipment purchased or s 1,950,000 anc w h a ve year useful life. s only wo years old has a terriinal cisposal value of S0 and is depreciated on a straight-line basis. The equipment has a current disposal price of S700,000. However, the emergence of a new molding technology has led TechTeach to coider either upgrading or replacing the production equipment. The following table presents data for the two altermatives: t (click to view the data for the two alternatives.) All equipment costs will continue to be deprecisted on a straight-line basis. For simplicity, ignore income taxes nd the time value of money Read the recuirements. i Data Table Roquirement 1. Should TechTeach upgrade its production line or replace t? Show your calculations. Determine the total relevant costs over 3 years. (f a box is not used in the table, leave the box empty do not enter a zero. Use parentheses or a m Replace Upgrade Over 3 years Replace $ 3.000,000 S 4,000,000 Upgrade Difference One time oquipment costs 145 S Variable manufacturing cost per desk 90 Remaining useful life of equipment (years) Terminal disposal value of equipment Total relevant costs Requiremen PrintDane 1. Should TechTeach upgrade its production line or replace il? Show your calculations. 2. Now suppose the one-time equipment cost to replace the productio equipment is somewhat negotiable. All other data are as given previously. What is the maximurm one-time equipment cost that TechTeach would be wlng to pay to replace rather than upgrade the old equiprment? 3. Assume that the capital expenditures to replace and upgrade the production equipment are as given in the original exercise, but that the production and sales quantity is not known. For what production and sales quantity would TechTeach (i upgrade the equipment or (ii) replace the Choose from any list or enter any number in the input fields and then click Check Answer. t all data are as given in the original exercise. Dan Doria is TechTeach's manager and his bonus is based on operating income. Because he is likely to relocate after about a year his current bonus is his primary concem. Which alternative would Doria choose? Explain. parts Clear All