Provide answer in table formatXinhong Company is considering replacing one of its manufacturing machines. The machine has a book value of $43,000 and a remaining useful life of five years, at which time its salvage value will be zero. It has a current market value of $53,000. Variable manufacturing costs are $33,900 per year for this machine. Information on two alternative replacement machines follows. Alternative A Alternative BCost$120,000 $119,000 Variable manufacturing costs per year 22,500 10,300 Calculate the total change in net income if Alternative A, B is adopted. Should Xinhong keep or replace its manufacturing machine? If the machine should be replaced, which alternative new machine should Xinhong purchase? XinhongPurchaseAlternative A Alternative BCalculate the total change in net income if Alternative A is adopted. (Cash outflows should be indicated by a minus sign.)ALTERNATIVE A: INCREASE OR (DECREASE) IN NET INCOMECost to buy new machineCash received to trade in old machineReduction in variable manufacturing costsTotal change in net income< Alternative AAlternative B >Alternative A Alternative BXinhongPurchaseCalculate the total change in net income if Alternative B is adopted. (Cash outflows should be indicated by a minus sign.)ALTERNATIVE B: INCREASE OR (DECREASE) IN NET INCOMECost to buy new machineCash received to trade in old machineReduction in variable manufacturing costsTotal change in net income< Alternative AXinhong Purchase >XinhongPurchaseAlternative A Alternative BShould Xinhong keep or replace its manufacturing machine? If the machine should be replaced, which alternative newmachine should Xinhong purchase?Which option should Xinhong choose?< Alternative BXinhong Purchase>

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Answered: Provide answer in table format Xinhong…

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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Provide answer in table format

Xinhong Company is considering replacing one of its manufacturing machines. The machine has a book value of $43,000 and a remaining useful life of five years, at which time its salvage value will be zero. It has a current market value of $53,000. Variable manufacturing costs are $33,900 per year for this machine. Information on two alternative replacement machines follows.

	Alternative A		Alternative B
Cost	$	120,000		$	119,000
Variable manufacturing costs per year		22,500			10,300

Calculate the total change in net income if Alternative A, B is adopted. Should Xinhong keep or replace its manufacturing machine? If the machine should be replaced, which alternative new machine should Xinhong purchase?

Xinhong
Purchase
Alternative A Alternative B
Calculate the total change in net income if Alternative A is adopted. (Cash outflows should be indicated by a minus sign.)
ALTERNATIVE A: INCREASE OR (DECREASE) IN NET INCOME
Cost to buy new machine
Cash received to trade in old machine
Reduction in variable manufacturing costs
Total change in net income
< Alternative A
Alternative B >
Alternative A Alternative B
Xinhong
Purchase
Calculate the total change in net income if Alternative B is adopted. (Cash outflows should be indicated by a minus sign.)
ALTERNATIVE B: INCREASE OR (DECREASE) IN NET INCOME
Cost to buy new machine
Cash received to trade in old machine
Reduction in variable manufacturing costs
Total change in net income
< Alternative A
Xinhong Purchase >
Xinhong
Purchase
Alternative A Alternative B
Should Xinhong keep or replace its manufacturing machine? If the machine should be replaced, which alternative new
machine should Xinhong purchase?
Which option should Xinhong choose?
< Alternative B
Xinhong Purchase>

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