Chapter 12, Problem 12.2.2P

Differential analysis report for machine replacement proposal

Catalina Tooling Company is considering replacing a machine that has been used in its factory for two years. Relevant data associated with the operations of the old machine and the new machine, neither of which has any estimated residual value, are as follows:

Annual nonmanufacturing operating expenses and revenue are not expected to be affected by the purchase of the new machine.

Instructions

List other factors that should be considered before a final decision is reached.