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 $39,000 and a remaining useful life of five

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 $39,000 and a remaining useful life of five years, at which time its salvage value will be zero. It has a current market value of $49,000 Variable manufacturing costs are $33.400 per year for this machine, Information on two alternative replacement machines follows. Cost Variable manufacturing costs per year Alternative A $ 124,000 22,800 Alternative B $117,000 10,900 Calculate the total change in net income if Alternative A, B is adopted. Should Xinhong keep or replace its manufacturing machine? 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 Xinhong Purchase Calculate the total change in net income ir Alternative A is adopted. (Cash outnows should be indicated by a minus sign.) ALTERNATIVE A: INCREASE OR (DECREASE) IN NET INCOME Cost to buy new machine Cash recolved to trade in old machine Alternative A Alternative B Xinhong Purchase he 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 INCOME Cost to buy new machine Cash received to trade in old machine Reduction in variable manufacturing costs Total change in net income $ 0 Alternative B > Alterative Alternative B Xinhong Purchase 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 S

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

Investments Analysis And Management

Authors: Charles P. Jones, Gerald R. Jensen

14th Edition

1119578078, 978-1119578079

More Books

Students also viewed these Accounting questions

Question

Describe forecasting requirements.

Answered: 1 week ago