Bonita company has a factory machine with a book value of $152,000 and a remaining useful life of 4years. A new machine is available at a cost of 252000 this Mach will have 4year useful life with no salvage value. The new machine will lower annual variable manufacturing cost from $600,000 to $503,000 Prepare an analysis that shows whether bonita should retain or replace the old machine. Keep equipment replace equipment net income increase (decrease) Variable cost New machine cost
Bonita company has a factory machine with a book value of $152,000 and a remaining useful life of 4years. A new machine is available at a cost of 252000 this Mach will have 4year useful life with no salvage value. The new machine will lower annual variable manufacturing cost from $600,000 to $503,000 Prepare an analysis that shows whether bonita should retain or replace the old machine. Keep equipment replace equipment net income increase (decrease) Variable cost New machine cost
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Bonita company has a factory machine with a book value of $152,000 and a remaining useful life of 4years. A new machine is available at a cost of 252000 this Mach will have 4year useful life with no salvage value. The new machine will lower annual variable manufacturing cost from $600,000 to $503,000
Prepare an analysis that shows whether bonita should retain or replace the old machine.
Keep equipment replace equipment net income increase (decrease)
Variable cost
New machine cost
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