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v Seved Help Lopez Company is considering replacing one of its old manufacturing machines. The old machine has a book value of $47000 and a
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Seved Help Lopez Company is considering replacing one of its old manufacturing machines. The old machine has a book value of $47000 and a remaining useful life of five years. It can be sold now for $57000 Variable manufacturing costs are $49.000 per year for this old machine. Information on two alterative replacement machines follows. The expected useful life of each replacement machine is five years. Machine A Machine Purchase price $ 115,000 $ 131,000 Variable manufacturing costs per year 20,000 13,000 (a) Compute the income increase or decrease from replacing the old machine with Machine A (b) Compute the income increase or decrease from replacing the old machine with Machine B. (c) Should Lopez keep or replace its old machine? (d) If the machine should be replaced which new machine should Lopez purchase? Complete this question by entering your answers in the tabs below. Reg Reg B Reg C and D Compute the income increase or decrease from replacing the old machine with Machine A (Amounts to be deducted should be Indicated with a minus sign.) Income Increase Machine A Keep or Replace Analysis Keep Replace (Decrease) from Replacing Revonues Solo of exsting machine 5 ors 57,000 Costs Answer is not complete Complete this question by entering your answers in the tabs below. Req A ReqB Req Cand D Compute the income increase or decrease from replacing the old machine with Machine A. (Amounts to be deducted should be indicated with a minus sign.) Machine A+ Keep or Replace Income increase Keep Replace Docrease) from Analysis Replacing Revenues Sale of exsting machine Os 57000 Costs Purchase of new machine 118.000 Variable manufacturing costs S 470003 S 47.000 Income (oss) $ $ 175,000 222,000 3 Rega ReqB > 7 Answer is not complete. Complete this question by entering your answers in the tabs below. Reg A Req Req Cand D Compute the income increase or decrease from replacing the old machine with Machine B. (Amounts to be deducted should be indicated with a minus sign.) Machine B: Keep or Replace Analysis Keep Replace Income Increase (Decrease) from Replacing Revenues Sale of existing machine Costs Purchase of now machine Variable manufacturing costs Income (loss) 0 S 0 S 0 Answer is not complete. Complete this question by entering your answers in the tabs below. Req A ReqB ReqC and D (c) Should Lopez keep or replace its old machine? (d) If the machine should be replaced, which new machine should Lopez purchase? (c) Should Lopez keep or replace its old machine? (a) Which new machine should Lopez purchase? Step by Step Solution
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