Respuesta :
Answer:
It is more convenient the new machine.
Explanation:
Giving the following information:
Corba purchased the old machine for $600,000, and there is $180,000 of accumulated depreciation recorded for the machine. It has a 10-year remaining useful life and a $0 salvage value. It costs $480,000 per year to operate. The new machine would have a 10-year useful life and a $0 salvage value. It would cost $1,200,000, and its annual operating costs would be $361,200. If the old machine is replaced, it can be sold for $48,000 today.
We will make an incremental analysis.
Year 0= 48,000 - 1,200,000= -1,152,000
Year 1 to 10:
Cost save= 480,000 - 361,200= 118,800*10= 1,188,000
Effect on income= 1,188,000 - 1,152,000= 36,000
It is more convenient the new machine.
The cost of replacing the old equipment is reduced by 36,000 dollars. As a result, the new machine is more convenient.
What is the net advantage of Machine replacement?
[tex]\text{Old Machine's current price} = 48,000\\\text{New Machine's Cost} = 1,200,000\\\text{For 10 useful years}:\\\text{i.e., Annual Operating Costs} = 361,200\\\text{Operating cost old machine} = 480,000\\\text{The incremental analysis for Year 0 would be}:\\48,000 - 1,200,000= -1,152,000\\\text{Cost save}= 480,000 - 361,200\\= 118,800\text{ x }10\\= 1,188,000 \\\text{Effect on income}= 1,188,000 - 1,152,000\\= 36,000[/tex]
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