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why might Lewis be reluctant to purchase the networked PCs? Problem for Self-Study Wally Lewis is manager of the engineering development division of Goldcoast Products.
why might Lewis be reluctant to purchase the networked PCs?
Problem for Self-Study Wally Lewis is manager of the engineering development division of Goldcoast Products. Lewis has just received a proposal signed by all 15 of his engineers to replace the workstations with networked personal computers (networked PCs). Lewis is not enthusiastic about the proposal. Data on workstations and networked PCs are: Workstations Networked PCs S300,000 5 years 2 years 3 years $120,000 $180,000 $135,000 3 years 0 years 3 years Not acquired yet Not acquired yet Not acquired yet $0 $10,000 $1,000,000 Original cost Useful life Current age Remaining useful life Accumulated depreciation Current book value Current disposal value (in cash) Terminal disposal value (in cash 3 years from now) S0 Annual computer-related cash operating costs Annual revenues $95,000 $40,000 $1,000,000 $880,000 Annual non-computer-related operating costs $880,000 Lewis's annual bonus includes a component based on division operating income. He has a promotion possibility next year that would make him a group vice president of Goldcoast ProductsStep by Step Solution
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