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Xinhong Company is considering replacing one of its manufacturing machines. The machine has a book value of $39,000 and a remaining useful life of 5
Xinhong Company is considering replacing one of its manufacturing machines. The machine has a book value of $39,000 and a remaining useful life of 5 years, at which time its salvage value will be zero. It has a current market value of $40,000. Variable manufacturing costs are $33, 500 per year for this machine. Information on two alternative replacement machines follows. 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.)
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