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Sandhill Enterprises relies heavily on a copier machine to process its paperwork. Recently the copy clerk has not been able to process all the necessary

Sandhill Enterprises relies heavily on a copier machine to process its paperwork. Recently the copy clerk has not been able to process all the necessary copies within the regular work week. Management is considering updating the copier machine with a faster model.

Current Copier

New Model

Original purchase cost

$11,600 $23,200

Accumulated depreciation

8,200

Estimated operating costs (annual)

7,300 2,100

Useful life

5 years 5 years

If sold now, the current copier would have a salvage value of $1,000. If operated for the remainder of its useful life, the current machine would have zero salvage value. The new machine is expected to have zero salvage value after five years. Prepare an analysis to show whether the company should retain or replace the machine. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45). Do not leave any field blank. Enter 0 for the amounts.)

Retain Machine

Replace Machine

Net Income Increase (Decrease)

select an item New Machine CostSalvage ValueOperating CostsAccumulated DepreciationTotals

$enter a dollar amount $enter a dollar amount $enter a dollar amount

select an item New Machine CostAccumulated DepreciationSalvage ValueOperating CostsTotals

enter a dollar amount enter a dollar amount enter a dollar amount

select an item New Machine CostSalvage ValueOperating CostsTotalsAccumulated Depreciation

enter a dollar amount enter a dollar amount enter a dollar amount

select a closing name Accumulated DepreciationSalvage ValueTotalsNew Machine CostOperating Costs

$enter a total amount $enter a total amount $enter a total amount

The copier machine should be select an option retainedreplaced.

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