Xinhong Company: 1 Question (3 parts)

Exercise 10-12 Keep or replace LO A1 Xinhong Company is considering replacing one of Its manufacturing machines. The machine has a book value of $38,000 and a remaining useful lfe of 4 years, at which time its salvage value will be zero. It has a current market value of $48,000. Varlable manufacturing costs are $33,300 per year for this machine. Information on two alternative replacement machines follows. Cost Variable manufacturing costs per year Alternative $128,888 22,288 Alternative B $115,888 18,3ee Calculate the total change in net income if Alternative A, B Is adopted. Should XInhong keep or replace its manufacturing machine? If the machine should be replaced, which alternative new machine should Xinhong purchase? Complete this question by entering your answers in the tabs below Alternative Al Alternative B Xinhong Purchase Calculate the total change in net income if Alternative A is adopted. (Cash outflows should be indicated by a minus sign.) ALTERNATIVE A: INCREASE OR (DECREASE) IN NE Cost to buy new machine Cash received to trade in old machine Reduction in variable manufacturing costs Total change in net income INCOME