Exercise 23-10 (Algo) Keep or replace LO P5Lopez Company is considering replacing one of its old manufacturing machines. The old machine has a book value of $49,000 and aremaining useful life of five years. It can be sold now for $59,000. Variable manufacturing costs are $49,000 per year for this oldmachine, Information on two alternative replacement machines follows. The expected useful life of each replacement machine is fiveyears.Purchase priceVariable manufacturing costs per year(a) Compute the income increase or decrease from replacing the old machine with Machine A(b) Compute the income increase or decrease from replacing the old machine with Machine B.(c) Should Lopez keep or replace its old machine?(d) if the machine should be replaced, which new machine should Lopez purchase?Req AComplete this question by entering your answers in the tabs below.RevenuesMachine A: Keep or Replace AnalysisReq BCompute the income increase or decrease from replacing the old machine with Machine A. (Amounts to be deducted should beindicated with a minus sign.)CostsSale of existing machinePurchase of new machineVariable manufacturing costsIncome (loss)Req ACostsReq C and DReq BMachine B: Keep or Replace AnalysisRevenuesSale of existing machinePurchase of new machineVariable manufacturing costsIncome (loss)Req C and DSComplete this question by entering your answers in the tabs below.$Machine A$ 125,00020,000Keep(KeepDCompute the income increase or decrease from replacing the old machine with Machine B. (Amounts to be deducted should beindicated with a minus sign.)Machine B$ 137,00013,0000 $0 $< Req AReplaceReplace00 $Income Increase(Decrease) fromReplacingReq B >Income Increase(Decrease) fromReplacingReq C and D >00

Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…

Exercise 23-10 (Algo) Keep or replace LO P5 Lopez Company is considering replacing one of its old manufacturing machines. The old machine has a book value of $49,000 and a remaining useful life of five years. It can be sold now for $59,000. Variable manufacturing costs are $49,000 per year for this old machine, Information on two alternative replacement machines follows. The expected useful life of each replacement machine is five years. Purchase price Variable manufacturing costs per year Machine A $ 125,000 20,000 Machine B $ 137,000 13,000 (a) Compute the income increase or decrease from replacing the old machine with Machine A (b) Compute the income increase or decrease from replacing the old machine with Machine B. (c) Should Lopez keep or replace its old machine? (d) if the machine should be replaced, which new machine should Lopez purchase?

Exercise 23-10 (Algo) Keep or replace LO P5 Lopez Company is considering replacing one of its old manufacturing machines. The old machine has a book value of $49,000 and a remaining useful life of five years. It can be sold now for $59,000. Variable manufacturing costs are $49,000 per year for this old machine, Information on two alternative replacement machines follows. The expected useful life of each replacement machine is five years. Purchase price Variable manufacturing costs per year Machine A $ 125,000 20,000 Machine B $ 137,000 13,000 (a) Compute the income increase or decrease from replacing the old machine with Machine A (b) Compute the income increase or decrease from replacing the old machine with Machine B. (c) Should Lopez keep or replace its old machine? (d) if the machine should be replaced, which new machine should Lopez purchase?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

None
57
proper explain and show all step Do not give solution in image format
M1
#24 * Using NPW to Decide Between Competing Projects: Machine X has an initial cost of $12,000 and annual maintenance of $700 per year. It has a useful life of four years and no salvage value at the end of that time. Machine Y costs $22,000 initially and has no maintenance costs during the first year. Maintenance is $200 at the end of the second year and increases by $200 per year thereafter. Machine Y has a useful life of eight years and an anticipated salvage value of $5,000 at the end of its useful life. If the MARR is 6%, what is the approximate Net Present Worth (NPW) of machine Y? A. -$33,015 B. -$23,781 C. -$22,831 D. -$19,365
Please dont provide solution image based thanx
Accessibility: Unavailable QUESTION 6 Simple Rate of Return Method The management of Stillford Micro Brew is considering the purchase of an automated bottling machine for $80,000. The machine would replace an old piece of equipment that costs $33,000 per year to operate. The new machine would cost $10,000 per year to operate. The old machine currently in use could be sold now for a scrap value of $5,000. The new machine would have a useful life of 10 years with no salvage value. Required: Compute the simple rate of return on the new automated bottling machine. 2
None
38. RYX Company has the chance to introduce a new product. RYX expects the product to sell for P75 with a variable cost per unit of P50. The annual fixed costs, depreciation not included is P4,500,000. The company expects to sell 300,000 units. To produce a new product line, the company needs to purchase a new machine that costs P6,000,000. The new machine is expected to last for four years with a very negligible salvage value. The company has a policy of depreciating its machine for both book and tax purposes for four years. The company has a marginal cost of capital of 13.75% and is subject to a tax rate of 40%. How much is the machine’s net present value?
Vikarmbhai
SH W S Current Attempt in Progress Bridgeport Hammocks is considering the purchase of a new weaving machine to prepare fabric for its hammocks. The machine under consideration costs $67,100 and will save the company $10,000 in direct labor costs. It is expected to last 10 years. Click here to view the factor table. (a) Calculate the internal rate of return on the weaving machine. (Round answer to 0 decimal place, e.g. 15.) H and Internal rate of return (b) If Bridgeport uses a 10% hurdle rate, should the company invest in the machine? eTextbook and Media Save for Later 3 So E D C 4 Ⓒ stv 888 R F 26 5 TS A T G 6 % B MacBook Air 223 Y OCT 5 H 3 N 00 FY H 8 Dil FO M I Attempts: 0 of 3 used Submit Answe W 9 K DO भ6 O L command F10 P V x opt
A cookie factory needs a new cookie machine. They have narrowed their choices to the following machines: a Cost $18000 25000 15000 Annual net savings 1055 2125 1020 IRR 7% 9% 8% Each machine has a 25-year useful life with no salvage value. If the MARR for this factory is 10%, which alternative should be chosen? (Incremental IRR analysis method is required)