Beltz company is considering the replacement of a machine

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Beltz company is considering the replacement of a machine that is presently used in the production of its product. The following data are available

                                Old Equipment        Replacement Equip

Original cost             $100,000                 $60,000

Useful life in yrs          15                              7

current age in yrs        8                                0

book value                $45,000                        -

Disposal Value         $28,000                          -

Disposal Value 7yrs     0                                 0

Annaul cash operating $12,000                 $9,000

Required

Ignoring income taxes, indicate the best alternative for Beltz Co. Provide computations to support your decision.

Reference no: EM13571883

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