Brioward College l Browe course schedule . 5YG2: x x- . Cengage Cergage ssignmen

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Brioward College l Browe course schedule . 5YG2: x x- . Cengage Cergage ssignmentMain.do?takeAssignmentSessionLocator= assignment.take Check My Work 2 rermaining eBook Animated Example Exercise 5. Replace Equipment G. A machine with a toak valua at $250,200 has an astimated slx-ycar Iitc. A propocal Is offcrod to scll the oid machina tor $21,100 and replacc t with a new machinc at a cost ot $282,5co. Thc ne machine has a slx yfc wth no ealdua valuc -- The new machine would recuce rnual direct labor costs from 9,700 to $39.800. Note: Consider an autlon a negative value; an inflow a pasitve valua. If an amount is zaro, erter 0 Hide Prepere differentialnalys s del ed Februery 18 2014, Un whethe' to contnue with the old macl re Alterndtive 1 or replece the old " thine Alte"et ve 2 Differential Analysis Continue with Old Machine (Alt. 1)or Replace Old Machine (Alt. 2) February 18, 2014 Continue with Old Machine lAlternative 1) Replace Old Machine lAlternative 2 Differential Effect on Income |Alternative 2) Piaceeds from sale of cld ruschire Purchase price Direct labor [5 years: Income (Lass Should the curlipany continue with the uld mechine Alternetive 1) ' replace the old machete (Alternative 2 ? ccck My Work(2 remaining Type here to search 10-25 P 1128/2017

Explanation / Answer

Differential Analysis

Alternative 1 Alternative 2 Differential effect on Income
(Alternative 2) Revenues: Proceeds from sale of old machine $216100 $216100 Costs: Purchase price $282500 ($282500) Direct labor (6 years) 298200 238800 59400 Income (loss) ($514300) ($521300) ($7000)

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