Question

a company is considering replacing an existing machine with a new machine. based on the information below, should the company keep or replace the existing machine? existing machine new machine book value $ 35,000 purchase price $ 75,000 variable manufacturing costs per year $ 10,000 variable manufacturing costs per year $ 8,000 salvage value $ 0 selling price $ 40,000 remaining useful life 2 years useful life 5 years

Answer 1

Answer: Keep the existing machine because the new machine will decrease overall income by $55,000

Step-by-step explanation: