night, plus every third Saturday, to keep up with the volume of sales invoices. Management is considering updating its computer with a
faster model that would eliminate all of the overtime processing.
If sold now, the current machine would have a salvage value of $ If operated for the remainder of its useful life, the current
machine would have zero salvage value. The new machine is expected to have zero salvage value after years.
Prepare an incremental analysis to determine whether the current machine should be 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 eg or parentheses
eg
New machine cost
Salvage value old
Total
The current machine should be
eTextbook and Media
