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Rory Company has an old machine with a book value of $79,000 and a remaining fiveyear useful life. Rory is considering purchasing a new machine
Rory Company has an old machine with a book value of $79,000 and a remaining fiveyear useful life. Rory is considering purchasing a new machine at a price of $104,000. Rory can sell its old machine now for $71,000. The old machine has variable manufacturing costs of $35,000 per year. The new machine will reduce variable manufacturing costs by $14,000 per year over its fiveyear useful life. to} Prepare a keep or replace analysis ofincome effects for the machines. {b} Should the old machine be replaced? Complete this question by entering your answers in the tabs below. Required .0. Required B Prepare a keep or replace analysis of income effects for the machines. Revenues Sale of existing machine Costs Purchase of new.r machine Variable manufacturing costs Income {loss} Required B ) Rory Company has an old machine with a book value of $795000 and a remaining fiveyear useful life. Rory is considering purchasing a new machine at a price of $104,000. Rory can sell its old machine now for $71,000. The old machine has variable manufacturing costs of$35,000 per year. The new machine will reduce variable manufacturing costs by $14,000 per year over its five-year useful life. to} Prepare a keep or replace analysis of income effects for the machines. {b} Should the old machine be replaced? Complete this question by entering your answers in the tabs below. Required A Required E. Should the old machine be replaced? Should the old machine be replaced? I I
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