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The TechGuide Company produces and sells modular computer desks. It's current technology purchased for $1,800,000 and with a five-year useful life, is only two years
The TechGuide Company produces and sells modular computer desks. It's current technology purchased for $1,800,000 and with a five-year useful life, is only two years old. The emergence of a new molding technology has led TechGuide to consider either upgrading or replacing its current production equipment. The following data presents the data for the two alternatives: Upgrade Replace One-time equipment costs $780,000 $950,000 Variable manufacturing cost per desk $60 $45 Remaining useful le of equipment (years) Terminal disposal value of equipment $0 6,200 Number of desks to be produced Selling price per desk $780 Current disposal value of existing machine $180,000 Include negative signs as appropriate (costs are positive, revenues are negative, net negative differences should have a negative sign) What are the cash operating costs to upgrade, over three years? What are the cash operating costs to replace, over three years? What is the difference between upgrade and replace for cash operating costs? If we upgrade, what is the current disposal price? If we replace, what is the current disposal price? What is the difference between upgrade and replace for current disposal price? If we upgrade, what is the depreciation cost? If we replace, what is the depreciation cost? MacBook
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