Calculate the total change in net income

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Reference no: EM131202889

Xinhong Company is considering replacing one of its manufacturing machines. The machine has a book value of $38,000 and a remaining useful life of 5 years, at which time its salvage value will be zero. It has a current market value of $48,000. Variable manufacturing costs are $33,300 per year for this machine. Information on two alternative replacement machines follows. Alternative A Alternative B Cost $ 115,000 $ 111,000 Variable manufacturing costs per year 22,200 10,200 Calculate the total change in net income if Alternative A is adopted. (Cash outflows should be indicated by a minus sign.) Calculate the total change in net income if Alternative B is adopted. (Cash outflows should be indicated by a minus sign.) 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 Keep the manufacturing machine

Reference no: EM131202889

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