J&H Company has a router platform with a book value of $75,000 and a three-year remaining ife. A new router platform is available at a cost of $135,000, and J&H can receive $17,000 for trading in the old router platform. The old router platform has variable manufacturing costs of $61,000 per year. The new router platform will reduce variable manufacturing costs by $32.000 per year over its three-year ife Should the router platform be replaced? Multiple Choice Yes, as will increase income by $32,000 OD 16Hw noase income by $22.000 router platom cument technology

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter9: Capital Budgeting And Cash Flow Analysis
Section: Chapter Questions
Problem 14P
Question
J&H Company has a router platform with a book value of $75,000 and a three-year remaining life. A new router platform is available at a cost of $135,000, and J&H can receive $17,000 for
trading in the old router platform. The old router platform has variable manufacturing costs of $61,000 per year. The new router platform will reduce variable manufacturing costs by
$32.000 per year over its three-year ife. Should the router platform be replaced?
Mutiple Choice
Yes, as will increase income by $32.000 in
Yes, as the company wit increase income by $22,000 total
J&H will be not be better worse off by replacing the router platform
Yes as it is always important to have current technology
Transcribed Image Text:J&H Company has a router platform with a book value of $75,000 and a three-year remaining life. A new router platform is available at a cost of $135,000, and J&H can receive $17,000 for trading in the old router platform. The old router platform has variable manufacturing costs of $61,000 per year. The new router platform will reduce variable manufacturing costs by $32.000 per year over its three-year ife. Should the router platform be replaced? Mutiple Choice Yes, as will increase income by $32.000 in Yes, as the company wit increase income by $22,000 total J&H will be not be better worse off by replacing the router platform Yes as it is always important to have current technology
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