The law firm of Matadin and Howe relies heavily on a colour laser printer to process the paperwork. Recently the printer has not functioned well and print jobs were not being processed. Management is considering updating the printer with a faster model.

Current New

Printer Model

Original purchase cost $30,400 $24,500

Accumulated depreciation 17,900 ?

Estimated operating costs (annual) 3,100 1,800

Useful life 4years 4years

If sold now, the current printer would have a salvage value of $3,600. If operated for the remainder of its useful life, the current printer would have zero salvage value. The new printer is expected to have zero salvage value after 4years.

analysis to show whether the company should retain or replace the printer.(If an amount reduces the net income then enter with a negative sign preceding the number, e.g. -15,000 or parenthesis, e.g. (15,000).)

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The law firm of Matadin and Howe relies heavily on a colour laser printer to process the paperwork. Recently the printer has not functioned well and print jobs were not being processed. Management is considering updating the printer with a faster model. Original purchase cost $30,400 $24,500 Accumulated depreciation 17,900 Estimated operating costs (annual) 3,100 1,800 Useful life 4 years 4 years If sold now, the current printer would have a salvage value of $3,600. If operated for the remainder of its useful life, the current printer would have zero salvage value. The new printer is expected to have zero salvage value after 4 years. Prepare an analysis to show whether the company should retain or replace the printer. (Ifan amount reduces the net income then enter with a negative sign preceding the number, e.g. -15,000 or parenthesis, e.g. (15,000).) Period of 4 years Variable costs $ Salvage value New machine cost Mi Mi mm B The company should the printer