A machine with a book vale of $305,000 has an estimated 6-year life. A proposal is offered to sell the old machine for $390,000 and
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A machine with a book vale of $305,000 has an estimated 6-year life. A proposal is offered to sell the old machine for $390,000 and replace it with a new machine at a cost of $473,000. The new machine has a 6-year life with no residual value. The new machine would reduce annual direct labor costs from $91,000 to $74,000. Prepare a differential analysis dated October 3 on whether to Continue with Old Machine (Alternative 1) or Replace Old Machine (Alternative 2).
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- Dauten is offered a replacement machine which has a cost of 8,000, an estimated useful life of 6 years, and an estimated salvage value of 800. The replacement machine is eligible for 100% bonus depreciation at the time of purchase- The replacement machine would permit an output expansion, so sales would rise by 1,000 per year; even so, the new machines much greater efficiency would cause operating expenses to decline by 1,500 per year The new machine would require that inventories be increased by 2,000, but accounts payable would simultaneously increase by 500. Dautens marginal federal-plus-state tax rate is 25%, and its WACC is 11%. Should it replace the old machine?A machine with a book value of $246,000 has an estimated six-year life. A proposal is offered to sell the old machine for $217,100 and replace it with a new machine at a cost of $280,000. The new machine has a six-year life with no residual value. The new machine would reduce annual direct labor costs from $49,800 to $39,800. Prepare a differential analysis dated October 3 on whether to continue with the old machine (Alternative 1) or replace the 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) October 3 Continue withOld Machine(Alternative 1) Replace OldMachine(Alternative 2) Differential Effecton Income(Alternative 2) Revenues: Proceeds from sale of old machine $fill in the blank 8104d10e9fd9003_1 $fill in the blank 8104d10e9fd9003_2 $fill in the blank…A machine with a book value of $250,000 has an estimated six-year life. A proposal is offered to sell the old machine for $320,000 and replace it with a new machine at a cost of $390,000. The new machine has a six-year life with no residual value. The new machine would reduce annual direct labor costs from $75,000 to $61,000. Prepare a differential analysis dated October 3 on whether to continue with the old machine or replace the old machine. Explain the results.
- A machine with a book value of $250,800 has an estimated 6-year life. A proposal is offered to sell the old machine for $217,300 and replace it with a new machine at a cost of $284,000. The new machine has a 6-year life with no residual value. The new machine would reduce annual direct labor costs from $49,700 to $39,800. Prepare a differential analysis dated October 3 on 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 11 Continue with Replace Old Differential Old Machine Machine Effect (Alternative 1) (Alternative 2) (Alternative 2) Revenues: Proceeds from sale of old machine Costs: Purchase price Direct labor (6 years) Profit (loss) Should the company continue with the old machine (Alternative 1) or replace the old machine…offered to sell the old machine for $50,500 and replace it with a new machine at a cost of $75,000. The new machine has a five-year life with no residual value. The new machine would reduce annual direct labor costs from $11,200 to $7,400. a. Prepare a differential analysis dated April 11 on whether to continue with the old machine (Alternative 1) or replace the old machine (Alternative 2). If an amount is zero, enter "0". If required, use a minus sign to indicate a loss. Differential Analysis Continue Old Machine (Alt. 1) or Replace Old Machine (Alt. 2) April 11 Continuewith OldMachine(Alternative 1) ReplaceOldMachine(Alternative 2) DifferentialEffects(Alternative 2) Revenues: Proceeds from sale of old machine $ $ $ Costs: Purchase price Direct labor (5 years) Profit (Loss) $ $ (Can you please explaine how you got this number) $ b. Should the company continue with the old machine (Alternative 1) or replace the old…Nighthawk Inc. is considering disposing of an old machine with a book value of $22,500 and an estimated remaining life of three years. The old machine can be sold for $6,250. A new machine with a purchase price of $68,750 is being considered a replacement. It will have a useful life of three years and no residual value. It is estimated that the annual variable manufacturing costs will be reduced from $43,750 to $20,000 if the new machine is purchased. The three-year differential effect on profit from replacing the machine is a(n)
- A commercial oven with a book value of $56,160 has an estimated remaining five-year life. A proposal is offered to sell the oven for $17,550 and replace it with a new oven costing $100,320. The new machine has a five-year life with no residual value. The new machine would reduce annual maintenance costs by $19,290. Provide a differential analysis on the proposal to replace the commercial oven. Annual maintenance cost reduction $fill in the blank 1 Number of years applicable fill in the blank 2 Total differential decrease in cost $fill in the blank 3 Proceeds from sale of equipment fill in the blank 4 $fill in the blank 5 Cost of new equipment fill in the blank 6 Net differential decrease in cost from replacing equipment $fill in the blank 7A commercial oven with a book value of $47,460 has an estimated remaining 5 year life. A proposal is offered to sell the oven for $14,830 and replace it with a new oven costing $84,770. The new machine has a 5-year life with no residual value. The new machine would reduce annual maintenance costs by $16,300. Provide a differential analysis on the proposal to replace the commercial oven. Annual maintenance cost reduction $fill in the blank 1 Number of years applicable fill in the blank 2 Total differential decrease in cost $fill in the blank 3 Proceeds from sale of equipment fill in the blank 4 $fill in the blank 5 Cost of new equipment fill in the blank 6 Net differential decrease in cost from replacing equipment $fill in the blank 7A commercial oven with a book value of $87,000 has an estimated remaining 5-year life. A proposal is offered to sell the oven for $8,500 and replace it with a new oven costing $110,000. The new machine has a 5-year life with no residual value. The new machine would reduce annual maintenance costs by $23,000. Provide a differential analysis, in good form, on the proposal to replace the commercial oven.
- Starling Co. is considering disposing of a machine with a book value of $21,200 and estimated remaining life of five years. The old machine can be sold for $5,100. A new high-speed machine can be purchased at a cost of 69,500. It will have a useful life of five years and no residual value. It is estimated that the annual variable manufacturing costs will be reduced from $22,600 to $19,100 if the new machine is purchased. The five-year differential effect on profit from replacing the machine is a(n) a. decrease of $60,970 Ob. increase of $60,970 O c. increase of $46,900 Od. decrease of $46,900Starling Co. is considering disposing of a machine with a book value of $21,600 and estimated remaining life of five years. The old machine can be sold for $5,600. A new high-speed machine can be purchased at a cost of 73,800. It will have a useful life of five years and no residual value. It is estimated that the annual variable manufacturing costs will be reduced from $22,800 to $20,700 if the new machine is purchased. The five-year differential effect on profit from replacing the machine is a(n)Starling Co. is considering disposing of a machine with a book value of $24,500 and estimated remaining life of five years. The old machine can be sold for $5,200. A new high-speed machine can be purchased at a cost of 72,700. It will have a useful life of five years and no residual value. It is estimated that the annual variable manufacturing costs will be reduced from $22,500 to $19,900 if the new machine is purchased. The differential effect on income for the new machine for the entire five years is a.decrease of $54,500 b.increase of $70,850 c.increase of $54,500 d.decrease of $70,850