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The TechAssist Company produces and selis 7,400 modular computer desks per year at a seling price of $750 each. Its current production equipment, purchased
The TechAssist Company produces and selis 7,400 modular computer desks per year at a seling price of $750 each. Its current production equipment, purchased for $1,950,000 and with a 5-year useful ie, is only 2 years old. It has a terminal disposal value of $0 and is depreciated on a straight-ine basis. The equipment has a current disposal price of $750,000. However, the emergence of a new molding technology has led TechAssist to consider ather upgrading or replacing the production equipment. The following table presents data for the two alteratives: (Click to view the date for the two alternatives) Read the requirements Requirement 1. Should TechAssist upgrade its production line or reg Determine the total relevant coats over 3 years. (If an input field is not Over 3 years Data table 1 Total recevant costs Upgrade C mbers to be subvaciad Upgrade Replace 2 One-time equipment costs $ 2,000,000 $ 4.500.000 Replace Variable manufacturing cost per desk 165 $ 100 4 Remaining useful life of equipment (in years) 3 5 Terminal disposal value of equipment Al equipment costs will continue to be depreciated on a straight-line bass. For simpliuty gnore income taxes and the Sme value of money Print Done
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