Bryant Company has a factory machine with a book value of $90,500 and a remaining...
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Accounting
Bryant Company has a factory machine with a book value of $90,500 and a remaining useful life of 6 years. It can be sold for $32,200. A new machine is available at a cost of $453,600. This machine will have a 6-year useful life with no salvage value. The new machine will lower annual variable manufacturing costs from $625,200 to $525,200. Prepare an analysis showing whether the old machine should be retained or replaced. (In the first two columns, enter costs and expenses as positive amounts, and any amounts received as negative amounts. In the third column, enter net income increases as positive amounts and decreases as negative amounts.Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
RetainEquipment
ReplaceEquipment
Net Income Increase (Decrease)
Variable manufacturing costs
$enter the variable manufacturing costs in dollars
$enter the variable manufacturing costs in dollars
$enter the variable manufacturing costs in dollars
New machine cost
enter the cost of the new machine
enter the cost of the new machine
enter the cost of the new machine
Sell old machine
enter the proceeds from the sale of the old machine
enter the proceeds from the sale of the old machine
enter the proceeds from the sale of the old machine
Total
$enter a total amount
$enter a total amount
$enter a total amount
The old factory machine should be select an option retained or replaced.
Answer & Explanation
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