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Xinhong Company is considering replacing one of its manufacturing machines. The machine has a book value of $36,000 and a remaining useful life of four years, at which time its salvage value will be zero. It has a current market value of $46,000. Variable manufacturing costs are $33,900 per year for this machine. Information on two alternative replacement machines follows. Cost Variable manufacturing costs per year Calculate the total change in net income if Alternative A, B is adopted. Should Xinhong keep or replace its manufacturing machine? If the machine should be replaced, which alternative new machine should Xinhong purchase? Alternative A Alternative B Alternative A $117,000 22,000 Complete this question by entering your answers in the tabs below. Xinhong Purchase Alternative B $119,000 10,400 $ Calculate the total change in net income if Alternative A is adopted. (Cash outflows should be indicated by a minus sign.) ALTERNATIVE A: INCREASE OR (DECREASE) IN NET INCOME Cost to buy new machine $ (117,000) 46,000 Cash received to trade in old machine Reduction in variable manufacturing costs Total change in net income (71,000)

Xinhong Company is considering replacing one of its manufacturing machines. The machine has a book value of $36,000 and a remaining useful life of four years, at which time its salvage value will be zero. It has a current market value of $46,000. Variable manufacturing costs are $33,900 per year for this machine. Information on two alternative replacement machines follows. Cost Variable manufacturing costs per year Calculate the total change in net income if Alternative A, B is adopted. Should Xinhong keep or replace its manufacturing machine? If the machine should be replaced, which alternative new machine should Xinhong purchase? Alternative A Alternative B Alternative A $117,000 22,000 Complete this question by entering your answers in the tabs below. Xinhong Purchase Alternative B $119,000 10,400 $ Calculate the total change in net income if Alternative A is adopted. (Cash outflows should be indicated by a minus sign.) ALTERNATIVE A: INCREASE OR (DECREASE) IN NET INCOME Cost to buy new machine $ (117,000) 46,000 Cash received to trade in old machine Reduction in variable manufacturing costs Total change in net income (71,000)

Fundamentals Of Financial Management, Concise Edition (mindtap Course List)
Fundamentals Of Financial Management, Concise Edition (mindtap Course List)
10th Edition
ISBN:9781337902571
Author:Eugene F. Brigham, Joel F. Houston
Publisher:Eugene F. Brigham, Joel F. Houston
Chapter12: Cash Flow Estimation And Risk Analysis
Section: Chapter Questions
Problem 10P: Dauten is offered a replacement machine which has a cost of 8,000, an estimated useful life of 6...
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What is the reduction in variable manufacturing cost for alternative a and b
Xinhong Company is considering replacing one of its manufacturing machines. The machine has a book value of $36,000 and a remaining useful life of four years, at which time its salvage value will be zero. It has a current market value of $46,000. Variable manufacturing costs are $33,900 per year for this machine. Information on two alternative replacement machines follows. Cost Variable manufacturing costs per year Calculate the total change in net income if Alternative A, B is adopted. Should Xinhong keep or replace its manufacturing machine? If the machine should be replaced, which alternative new machine should Xinhong purchase? Alternative A Alternative B Alternative A $117,000 22,000 Complete this question by entering your answers in the tabs below. Xinhong Purchase $ Alternative B $119,000 10,400 Calculate the total change in net income Alternative A is adopted. (Cash outflows should be indicated by a minus sign.) ALTERNATIVE A: INCREASE OR (DECREASE) IN NET INCOME Cost to buy new machine $ (117,000) 46,000 Cash received to trade in old machine Reduction in variable manufacturing costs Total change in net income (71,000) Prev 1 of 5 + Next > G O
Transcribed Image Text:Xinhong Company is considering replacing one of its manufacturing machines. The machine has a book value of $36,000 and a remaining useful life of four years, at which time its salvage value will be zero. It has a current market value of $46,000. Variable manufacturing costs are $33,900 per year for this machine. Information on two alternative replacement machines follows. Cost Variable manufacturing costs per year Calculate the total change in net income if Alternative A, B is adopted. Should Xinhong keep or replace its manufacturing machine? If the machine should be replaced, which alternative new machine should Xinhong purchase? Alternative A Alternative B Alternative A $117,000 22,000 Complete this question by entering your answers in the tabs below. Xinhong Purchase $ Alternative B $119,000 10,400 Calculate the total change in net income Alternative A is adopted. (Cash outflows should be indicated by a minus sign.) ALTERNATIVE A: INCREASE OR (DECREASE) IN NET INCOME Cost to buy new machine $ (117,000) 46,000 Cash received to trade in old machine Reduction in variable manufacturing costs Total change in net income (71,000) Prev 1 of 5 + Next > G O
Xinhong Company is considering replacing one of its manufacturing machines. The machine has a book value of $36,000 and a remaining useful life of four years, at which time its salvage value will be zero. It has a current market value of $46,000. Variable manufacturing costs are $33,900 per year for this machine. Information on two alternative replacement machines follows. Cost Variable manufacturing costs per year Calculate the total change in net income if Alternative A, B is adopted. Should Xinhong keep or replace its manufacturing machine? If the machine should be replaced, which alternative new machine should Xinhong purchase? Alternative A Alternative B Alternative A $117,000 22,000 Complete this question by entering your answers in the tabs below. Xinhong Purchase $ Alternative B $119,000 10,400 Calculate the total change in net income if Alternative B is adopted. (Cash outflows should be indicated by a minus sign.) ALTERNATIVE B: INCREASE OR (DECREASE) IN NET INCOME Cost to buy new machine $ (119,000) 46,000 Cash received to trade in old machine Reduction in variable manufacturing costs Total change in net income (73,000) < Prev 1 of 5 # Next >
Transcribed Image Text:Xinhong Company is considering replacing one of its manufacturing machines. The machine has a book value of $36,000 and a remaining useful life of four years, at which time its salvage value will be zero. It has a current market value of $46,000. Variable manufacturing costs are $33,900 per year for this machine. Information on two alternative replacement machines follows. Cost Variable manufacturing costs per year Calculate the total change in net income if Alternative A, B is adopted. Should Xinhong keep or replace its manufacturing machine? If the machine should be replaced, which alternative new machine should Xinhong purchase? Alternative A Alternative B Alternative A $117,000 22,000 Complete this question by entering your answers in the tabs below. Xinhong Purchase $ Alternative B $119,000 10,400 Calculate the total change in net income if Alternative B is adopted. (Cash outflows should be indicated by a minus sign.) ALTERNATIVE B: INCREASE OR (DECREASE) IN NET INCOME Cost to buy new machine $ (119,000) 46,000 Cash received to trade in old machine Reduction in variable manufacturing costs Total change in net income (73,000) < Prev 1 of 5 # Next >
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