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 $40,000 and a remaining useful life of 4

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
Xinhong Company is considering replacing one of its manufacturing machines. The machine has a book value of $40,000 and a remaining useful life of 4 years, at which time its salvage value will be zero. It has a current market value of $50,000. Variable manufacturing costs are $33,200 per year for this machine. Information on two alternative replacement machines follows. ternative A Alternative B $124, 000 Cost $112,000 10,100 Variable manufacturing costs per year 22,600 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 A Alternative B 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 NET Cost to buy new machine Cash received to trade in old machine Reduction in variable manufacturing costs Trtal channa in nat income NCOME Complate this questlon by entearing your answers In the tabs below. Alternative A Alternative BPurchase Calculate the total change in net income if Alternative A is adopted. (Cash out ALTERNATIVE A: INCREASE OR (DECREASE) IN NET INCOME Cost to buy new machine Cash received to trade in old machine Reduction in variable manufacturing costs Total change in net income Alternative B Complete thls question by entering your answers in the tabs below. inhong | Alternative A Alternative B Calculate the total change in net income if Alternative B is adopted. (Cash outflows should be indicated by a minus sign.) ALTERNATIVE B: INCREASE OR (DECREASE) IN NET INCOME Cost to buy new machine Cash received to trade in old machine Reduction in variable manufacturing costs Total change in net income K Alternative A Xinhong Purchase 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 A Alternative Xinhong Purchase Should Xinhong keep or replace its manufacturing machine? If the machine should be replaced, which alternative new machine should Xinhong purchase? Which option should Xinhong choose? Alternative A Alternative B Keep the manufacturing machine

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_2

Step: 3

blur-text-image_3

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

Practitioners Guide To Business Impact Analysis Internal Audit And IT Audit

Authors: Priti Sikdar

1st Edition

036756792X, 978-0367567927

More Books

Students also viewed these Accounting questions