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Ridgeway Digital Components Company assembles eircuit boards by using a manually operated machine to insert electronk components. The originst cost of the machine i $8,800,
Ridgeway Digital Components Company assembles eircuit boards by using a manually operated machine to insert electronk components. The originst cost of the machine i $8,800, the accumulated depreciation is $23,500, its remaining useful life is 5 years, and its residual value is neglig ble. On october 1 of the current year, a propossil was made to replace the present manufacturing procedure with a fully automatic machine that has a purchase price of $122,300. The automatic machine has an estimated ureful life of 5 years and no significant residual value. For use in evaluating the proposal, the mansgerial accountant accumulated the following annual data on present and proposed operations: a. Piepare a differential analysis dated October 1 to determine whether to continue with (Aiternative 1) or replace (Aternative 2 ) the old machine. Prepare the analysis over the usetut life of the new machine, if an amount is zero, enter " 0 ". If required, use a minus sign to indicate a loss. a. Prepare a differential analysis dated October 1 to determine whether to continue with (Alternative 1) or replace (Alternative 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. b. Based coly on the data presented, should the proposal be accepted? C. Differences in copacity between the two alternatives is to consider before a final decision is made
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