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Ridgeway Digital Components Company assembles circuit boards by using a manually operated machine to insert electronic components. The original cost of the machine is $89,200,
Ridgeway Digital Components Company assembles circuit boards by using a manually operated machine to insert electronic components. The original cost of the machine is $89,200, the accumulated depreciation is $35,700, its remaining useful life is 5 years, and its residuat value is negligible, On october 1 of the current year, a proposal was made to replace the present manufacturing procedure with a fully automatic machine that has a purchase price of $185,500. The automatic machine has an estimated useful life of 5 years and no significant residual value. For use in evaluating the proposal, the managerial accountant accumulated the following annual data on present and proposed operations: a. Prepare a differential analysis dated October 1 to determine whether to continue with (Alternative 1 ) or replace (Aiternative 2 ) the old machine. Prepare the analysis over the useful life of the new machine. If an amount is zero, enter " 0 ", If required, use a minus sign to indicate a loss. Bifferential Analysis Continue with (AIt. 1) or Replace (AIt. 2) Old Machine a. Prepare a differential analysis dated October 1 to determine whether to continue with (Alternative 1 ) oe replace (Alternative 2 ) the old machine. Prepare the analysis over the usefut life of the new machine. If an amount is zero, enter " 0 ". If required, use a minus sign to indicate a loss. Differential Analysis
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