Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Xinhong Company is considering replacing one of its manufacturing machines. The machine has a book value of $37,000 and a remaining useful life of 4

Xinhong Company is considering replacing one of its manufacturing machines. The machine has a book value of $37,000 and a remaining useful life of 4 years, at which time its salvage value will be zero. It has a current market value of $47,000. Variable manufacturing costs are $33,000 per year for this machine. Information on two alternative replacement machines follows.

Alternative A Alternative B
Cost $ 120,000 $ 111,000
Variable manufacturing costs per year 22,600 10,100

Calculate the total change in net income if Alternative A is adopted. (Cash outflows should be indicated by a minus sign.)

Calculate the total change in net income if Alternative B is adopted. (Cash outflows should be indicated by a minus sign.)

Should Xinhong keep or replace its manufacturing machine? If the machine should be replaced, which alternative new machine should Xinhong purchase?

Keep the manufacturing machine
Alternative A
Alternative B

image text in transcribed

8. value: 2.00 points Required information 4. Determine each project's net present value using 8% as the discount rate. Assume that cash flows occur at each year-end. (Round your intermediate calculations.) Project Y Chart values are based on: n = 8% Amount X PV Factor = Present Value Select Chart Present Value of an Annuity of 1 Present value of cash inflows Present value of cash outflows Net present value Project z Chart values are based on: 8% Amount * PV Factor = Present Value Select Chart Present Value of an Annuity of 1 Present value of cash inflows Present value of cash outflows Net present value

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing E Commerce Systems And IT Infrastructure

Authors: Pearson

1st Edition

0536903662, 978-0536903662

More Books

Students also viewed these Accounting questions

Question

5. Some tables and other visuals aids.

Answered: 1 week ago

Question

mple 10. Determine d dx S 0 t dt.

Answered: 1 week ago

Question

5. Identify three characteristics of the dialectical approach.

Answered: 1 week ago