Required GH Company is trying to decide whether to replace a current piece of machinery with a new machine Using the below data, determine the relevant costs of the old machine and the new machine Should GH Company purchase the new machine (25 points) Old Machine New machine Original cost 100,000 Accumulated depreciation (50,000) Book value 50,000 Market value (now) 25,000 30,000 Salvage value (in 5 years) 5,000 8,000 Annual depreciation expense 11,000 Operating expenses Per year 9,000 4,500 Times number of years 4 4 Total operating expenses 36,000 18,000 Your calculations here Relevant costs Old Machine New Machine Total Your decision Keep the Old Machine or Buy the New Machine Why

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Required  GH Company is trying to decide whether to replace a current piece of machinery with a new machine  Using the below data, determine the relevant costs of the old machine and the new machine  Should GH Company purchase the new machine  (25 points) Old Machine New machine Original cost 100,000 Accumulated depreciation (50,000) Book value 50,000 Market value (now) 25,000 30,000 Salvage value (in 5 years) 5,000 8,000 Annual depreciation expense 11,000 Operating expenses Per year 9,000 4,500 Times number of years 4 4 Total operating expenses 36,000 18,000 Your calculations here  Relevant costs  Old Machine New Machine Total Your decision  Keep the Old Machine or Buy the New Machine  Why

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Required: GH Company is trying to decide whether to replace a current piece of machinery with a new machine. Using the below data, determine the

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Required: GH Company is trying to decide whether to replace a current piece of machinery with a new machine. Using the below data, determine the relevant costs of the old machine and the new machine. Should GH Company purchase the new machine?



(25 points)

	Old Machine	New machine
Original cost	100,000
Accumulated depreciation	(50,000)
Book value	50,000

Market value (now)	25,000	30,000
Salvage value (in 5 years)	5,000	8,000
Annual depreciation expense	11,000
Operating expenses
Per year	9,000	4,500
Times number of years	4	4
Total operating expenses	36,000	18,000



Your calculations here:
Relevant costs:	Old Machine	New Machine




Total

Your decision: Keep the Old Machine or Buy the New Machine? Why?