A company is trying to decide whether to buy a new delivery truck to replace their oldone. The old truck originally cost $32,000. The new truck will cost $45,000. If theybuy the new truck, they will sell the old truck to a used truck dealer for $4,000.Based on the information given, what is the immediate total incremental cost orbenefit of buying the new truck? (Indicate a net benefit as a positive number and anet cost as a negative number.)

Incremental cost of replacement of an asset means the additional cost incurred by the entity to…

Answered: A company is trying to decide whether…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Similar questions

If you were analyzing a replacement project and suddenly learnedthat the old equipment could be sold for $1,000 rather than $400,would this new information make the replacement look better orworse? Explain.
Saran Company has contacted Truckel with an offer to sell it 5,000 of the wickets for $18 each. If Truckel makes the wickets, variable costs are $16 per unit. Fixed costs are $8 per unit; however, $5 per unit is unavoidable. Should Truckel make or buy the wickets? a. Buy; savings = $15,000 b. Buy; savings = $5,000 c. Make; savings = $10,000 d. Make; savings = $5,000
Please help me. Fast solution please. Thankyou.
2. Suppose a business owner is trying to decide whether to invest in a new piece of machinery. The machine costs $160,000, and it is expected to generate revenue of $200,000. a. Solve for the expected rate of return on this machine. a. If the interest rate the business owner has to pay is 20%, will the business owner buy this machine? b. If the interest rate the business owner has to pay is 25%, will the business owner buy this machine? c. If the interest rate the business owner has to pay is 30%, will the business owner buy this machine?
Assume a company is going to make an investment of $470,000 in a machine and the following are the cash flows that two different products would bring in years one through four. Option A, Option B, Product A Product B $195,000 $145,000 195,000 175,000 65,000 60,000 25,000 100,000 A. Calculate the payback period of each product. Round your answers to 2 decimal places. Option A, Product A years years Option B, Product B B. Which of the two options would you choose based on the payback method? Ch 11 HW assignment take frame
Bathrooms and kitchens are typically the most important selling features of s home. Rouse Builders could differentiate the homes by upgrading the atmos and kitchens. The upgrades would cost $22,000 per home bur would enable Rouse Builders to increase the selling prices by $38.500 per home (Kitchen and bathroom upgrades typically add about 175% of their cost to the value of any home.) If Rouse Builders makes the upgrades, what will the new co-phus price per home be? Should the company differentiate in product in this manner?
Legendary Motors has 7,000 defective autos on hand, which cost $12, 880,000 to manufacture. Legendary can either sell these defective autos as scrap for $8,000 per auto, or spend an additional $18, 320, 000 on repairs and then sell them for $12,000 per unit. What is the net advantage to repair the autos compared to selling them for scrap? Group of answer choices $84,000,000 $18, 320, 000 $9, 680,000 $56,000,000
Answer what total relevant cost is for the keep old?
How would I do this problem?
Assume that you are thinking about starting your own small business. You have made the following estimates regarding this opportunity: You can rent a location for your business at a cost of $36, 000 per year. The equipment costs incurred to start the business would total $250,000. The equipment would have a 5-year useful life and a salvage value of S 25,000. Your company's estimated sales per year would equal $350,000 and its variable cost of goods sold would be 30% of sales. Other operating costs would include $56, 000 per year in salaries, S4, 000 per year for insurance, $25, 000 per year for utilities, and a 3% sales commission. The payback period for this investment opportunity is closest to: Multiple Choice 4.08 years, 2.20 years. 3.80 years. 3.08 years.
29) Foamsoft sells customized boat shoes. Currently, it sells 16,850 pairs of shoes annually at an average price of $75 a pair. It is considering adding a lower-priced line of shoes which sell for $59 a pair. Foamsoft estimates it can sell 4,500 pairs of the lower-priced shoes but will sell 1,100 fewer pairs of the higher-priced shoes by doing so. What is the estimated value of the erosion cost that should be charged to the lower-priced shoe project?
More Parts Liquidators specializes in buying excess parts inventories to resell or to incorporate into other products. They recently purchased parts for $130,000 and they have a buyer willing to pay $156,000. The company also can incorporate these parts into a new product at a cost of $97,500 and sell the new product for $247,000. What should More Parts Liquidators do? Sales Revenue Cost of Parts Additional Costs. Profit/loss More Parts should Parts Only New Product withparts Incremental

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