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Singapore Digital Components Co assembles circuit boards by using a manually operated machine to insert electronic components. The original cost of the machine is $60,000,
Singapore Digital Components Co assembles circuit boards by using a manually operated machine to insert electronic components. The original cost of the machine is $60,000, the accumulated depreciation is $24,000 On Feb 20, 2010, a proposal was made to replace the present manufacturing procedure with a fully automatic machine that will cost $111,000. Both machines have a remaining useful life of five years with negligible residual value. What are the sunk costs in this situation? Prepare an incremental analysis report, including both the net differential change in costs anticipated over the five years and the net annual differential change in costs anticipated. Based only on the date presented, should the proposal be accepted? What are some other factors to consider (qualitative?) before making a final decision
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