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Xinhong Company is considering replacing one of its manufacturing machines. The machine has a book Exercise 25-11 value of $45,000 and a remaining useful life

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Xinhong Company is considering replacing one of its manufacturing machines. The machine has a book Exercise 25-11 value of $45,000 and a remaining useful life of 5 years, at which time its salvage value will be zero. It has a Keep or replace current market value of $52,000. Variable manufacturing costs are $36,000 per year for this machine. Infor 41 mation on two alternative replacement machines follows. Should Xinhong keep or replace its manufacturing machine? If the machine should be replaced, which alternative new machine should Xinhong purchase? Alternative A Alternative B .$115,000 19,000 $125,000 Cost Variable manufacturing costs per year......... 15,000

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