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Xinhong Company is considering replacing one of its manufacturing machines. The machine has a bo of $45,000 and a remaining useful life of five years,
Xinhong Company is considering replacing one of its manufacturing machines. The machine has a bo of $45,000 and a remaining useful life of five years, at which time its salvage value will be zero. It h rent market value of $52.000. Variable manufacturing costs are $36,000 per year for this machine. Informe on two alternative replacement machines follows. Should Xinhong keep or replace its manufacturi chine? If the machine should be replaced, which alternative new machine should Xinhong purchase? pe has a book value zero. It was a cu hine. Information manufacturing ma Alternative A Alternative B Cost.... Variable manufacturing costs per year..... $115,000 19,000 $125,000 15,000
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