Waukee Railroad is considering the purchase of a powerful, high-speed wheel grinder to replace a standard wheel grinder now in use. Selected information on the two machines follows: Standard Wheel Grinder High-Speed wheel Grinder $67,500 Original cost/New cost Accumulated depreciation to date Current salvage value Estimated cost per year to operate Remaining years of useful life $45,000 $18,000 $11,750 $26, 250 $16,250 5years 5years Required: Compute the net advantage or disadvantage of purchasing the high-speed wheel grinder covering the five-year period. Use only relevant costs in your analysis. Ignore tax effects. Net advantage Net disadvantage
Waukee Railroad is considering the purchase of a powerful, high-speed wheel grinder to replace a standard wheel grinder now in use. Selected information on the two machines follows: Standard Wheel Grinder High-Speed wheel Grinder $67,500 Original cost/New cost Accumulated depreciation to date Current salvage value Estimated cost per year to operate Remaining years of useful life $45,000 $18,000 $11,750 $26, 250 $16,250 5years 5years Required: Compute the net advantage or disadvantage of purchasing the high-speed wheel grinder covering the five-year period. Use only relevant costs in your analysis. Ignore tax effects. Net advantage Net disadvantage
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:Waukee Railroad is considering the purchase of a powerful, high-speed wheel grinder to replace a standard wheel grinder now in use.
Selected information on the two machines follows:
重
Standard
High-Speed
Wheel
Grinder
$67,500
Wheel
Grinder
Original cost/New cost
Accumulated depreciation to date
Current salvage value
Estimated cost per year to operate
Remaining years of useful life
$45,000
$18,000
$11,750
$26,250
$
$16,250
5years
5years
Required:
Compute the net advantage or disadvantage of purchasing the high-speed wheel grinder covering the five-year period. Use only
relevant costs in your analysis. Ignore tax effects.
Net advantage
Net disadvantage
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