Rory Company has a machine with a book value of $105,000 and a remaining five-year useful life. A new machine is available at a costof $113,500, and Rory can also receive $89,000 for trading in its old machine. The new machine will reduce variable manufacturingcosts by $21,500 per year over its five-year useful life.Calculate the incremental income. (Any losses or outflows should be entered with a minus sign.)Incremental Income From Replacing MachineIncremental income (incremental cost)

Cost of new machine = $105,000 Life = 5 years cash received from trade in of old machine = $89,000

and Rory can also receive $89,000 for trading in its old machine. The ne 1,500 per year over its five-year useful life. he incremental income. (Any losses or outflows should be entered with cremental Income From Replacing Machine

and Rory can also receive $89,000 for trading in its old machine. The ne 1,500 per year over its five-year useful life. he incremental income. (Any losses or outflows should be entered with cremental Income From Replacing Machine

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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