Replace Equipment A machine with a book value of $25,000 has an estimated remaining life of...
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Replace Equipment A machine with a book value of $25,000 has an estimated remaining life of 5 years. A proposal is offered to sell the old machine for $18,800 and replace it with a new machine at a cost of $40,000 The new machine has a 5-year de with no residual value. The new machine would reduce annual direct labor costs from $17,500 to $9,000. a. Prepare a differential analysis dated June 2 on whether to continue with the old machine (Alternative 1) or replace the old machine (Alternative 23. If an amount is zero, enter "0". If required, use a minus sign to indicate a loss. Differential Analysis Continue (Alt. 1) or Replace (Alt. 2) Old Machine June 2 Line them Description Revenues Proceeds from sale of old Cost: Purchase price Direct labor (5 years) Prof() Continue with Old Machine Replace Old Differential Effects Machine (Alternative 1) (Alternative 2) 0000 (Alternative 2) 0000 1000 0 b. Should the company continue with the old machine (Alternative 1) or replace the old machine (Alternative 23 Replace Equipment A machine with a book value of $25,000 has an estimated remaining life of 5 years. A proposal is offered to sell the old machine for $18,800 and replace it with a new machine at a cost of $40,000 The new machine has a 5-year de with no residual value. The new machine would reduce annual direct labor costs from $17,500 to $9,000. a. Prepare a differential analysis dated June 2 on whether to continue with the old machine (Alternative 1) or replace the old machine (Alternative 23. If an amount is zero, enter "0". If required, use a minus sign to indicate a loss. Differential Analysis Continue (Alt. 1) or Replace (Alt. 2) Old Machine June 2 Line them Description Revenues Proceeds from sale of old Cost: Purchase price Direct labor (5 years) Prof() Continue with Old Machine Replace Old Differential Effects Machine (Alternative 1) (Alternative 2) 0000 (Alternative 2) 0000 1000 0 b. Should the company continue with the old machine (Alternative 1) or replace the old machine (Alternative 23
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