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Xinhong Company is considering replacing one of its manufacturing machines. The machine has a book value of $38,000 and a remaining usoful life of 5

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Xinhong Company is considering replacing one of its manufacturing machines. The machine has a book value of $38,000 and a remaining usoful life of 5 years, at which time its salvage value will be zero. It has a current market value of $48,000. Variable manufacturing costs are $33,000 per year for this machine. Information on two altenative replacement machines follows. $ 122,000 22,700 113,000 10,500 8 Variable manufacturing costs per year 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 Total change in net income INCOME 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 Cost to buy new machine Cash received to trade in old machine Reduction in variable manufacturing costs Total change in net i INCOME

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