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Machine Replacement Decision A company is considering replacing an old piece of machinery, which cost $603,000 and has $348,400 of accumulated depreciation to date, with a new machine that has a purchase price of $484,200. The old machine could be sold for $62,100. The annual variable production costs associated with the old machine are estimated to be $157,500 per year for 8 years. The annual variable production costs for the new machine are estimated to be $98,800 per year for 8 years. > a. Prepare a differential analysis dated April 29 to determine whether to Continue with Old Machine (Alternative 1) or Replace Old Machine (Alternative 2). If an amount is zero, enter "0". For those boxes in which you must enter subtracted or negative numbers use a minus sign. Differential Analysis Continue with Old Machine (Alt. 1) or Replace Old Machine (Alt. 2) April 29 Revenues: Proceeds from sale of old machine. Costs: Purchase price Variable productions costs (8 years) Income (Loss) Replace Old Machine Machine (Alternative 1) (Alternative 2) Continue with Old The sunk cost is $ 000 b. What is the sunk cost in this situation? Differential Effects (Alternative 2) Determine whether to continue with (Alternative 1) or replace (Alternative 2) the old machine. Q000

Machine Replacement Decision A company is considering replacing an old piece of machinery, which cost $603,000 and has $348,400 of accumulated depreciation to date, with a new machine that has a purchase price of $484,200. The old machine could be sold for $62,100. The annual variable production costs associated with the old machine are estimated to be $157,500 per year for 8 years. The annual variable production costs for the new machine are estimated to be $98,800 per year for 8 years. > a. Prepare a differential analysis dated April 29 to determine whether to Continue with Old Machine (Alternative 1) or Replace Old Machine (Alternative 2). If an amount is zero, enter "0". For those boxes in which you must enter subtracted or negative numbers use a minus sign. Differential Analysis Continue with Old Machine (Alt. 1) or Replace Old Machine (Alt. 2) April 29 Revenues: Proceeds from sale of old machine. Costs: Purchase price Variable productions costs (8 years) Income (Loss) Replace Old Machine Machine (Alternative 1) (Alternative 2) Continue with Old The sunk cost is $ 000 b. What is the sunk cost in this situation? Differential Effects (Alternative 2) Determine whether to continue with (Alternative 1) or replace (Alternative 2) the old machine. Q000

FINANCIAL ACCOUNTING
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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Week 4 HW CH 25 #becausesneakers... B Brainly Revenues: Costs: Human My Hor v2.cengagenow.com/ilrn/takeAssignment... Q < Machine Replacement Decision A company is considering replacing an old piece of machinery, which cost $603,000 and has $348,400 of accumulated depreciation to date, with a new machine that has a purchase price of $484,200. The old machine could be sold for $62,100. The annual variable production costs associated with the old machine are estimated to be $157,500 per year for 8 years. The annual variable production costs for the new machine are estimated to be $98,800 per year for 8 years. a. Prepare a differential analysis dated April 29 to determine whether to Continue with Old Machine (Alternative 1) or Replace Old Machine (Alternative 2). If an amount is zero, enter "0". For those boxes in which you must enter subtracted or negative numbers use a minus sign. Differential Analysis Continue with Old Machine (Alt. 1) or Replace Old Machine (Alt. 2) April 29 Proceeds from sale of old machine Custom Order Income (Loss) Purchase price Variable productions costs (8 years) The sunk cost is $ Check My Work Ce x Replace Old Machine Machine (Alternative 1) (Alternative 2) b. What is the sunk cost in this situation? Assignment Score: 5.12% Continue with Old 0000 + Determine whether to continue with (Alternative 1) or replace (Alternative 2) the old machine. Differential Effects (Alternative 2) All work save Email Instructor Save and Exit * O Previous Σ Next > Submit Assignment for Grading
Transcribed Image Text:Week 4 HW CH 25 #becausesneakers... B Brainly Revenues: Costs: Human My Hor v2.cengagenow.com/ilrn/takeAssignment... Q < Machine Replacement Decision A company is considering replacing an old piece of machinery, which cost $603,000 and has $348,400 of accumulated depreciation to date, with a new machine that has a purchase price of $484,200. The old machine could be sold for $62,100. The annual variable production costs associated with the old machine are estimated to be $157,500 per year for 8 years. The annual variable production costs for the new machine are estimated to be $98,800 per year for 8 years. a. Prepare a differential analysis dated April 29 to determine whether to Continue with Old Machine (Alternative 1) or Replace Old Machine (Alternative 2). If an amount is zero, enter "0". For those boxes in which you must enter subtracted or negative numbers use a minus sign. Differential Analysis Continue with Old Machine (Alt. 1) or Replace Old Machine (Alt. 2) April 29 Proceeds from sale of old machine Custom Order Income (Loss) Purchase price Variable productions costs (8 years) The sunk cost is $ Check My Work Ce x Replace Old Machine Machine (Alternative 1) (Alternative 2) b. What is the sunk cost in this situation? Assignment Score: 5.12% Continue with Old 0000 + Determine whether to continue with (Alternative 1) or replace (Alternative 2) the old machine. Differential Effects (Alternative 2) All work save Email Instructor Save and Exit * O Previous Σ Next > Submit Assignment for Grading
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Section 179 Deduction and Modified Accelerated Cost Recovery System (MACRS) Depreciation
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