Prepare a cost comparison for replacing the old equipment

Assignment Help Accounting Basics

Reference no: EM13484730

Company is considering the replacement of equipment used in operations. The following data are available:

Old Equipment New Equipment

Original cost $93,000 $60,000

Useful life in years 13 6

Current age in years 7 0

Book value $57,000 -

Disposal value now $50,000 -

Disposal value in 6 years 0 0

Annual cash operating costs $14,000 $11,000

Required:

A) Prepare a cost comparison for replacing the old equipment. Use only relevant items and add the items together for the next 6 years.

B) Should the old equipment be replaced?

Reference no: EM13484730

Questions Cloud

The cost of goods sold rate is 65 and the desired ending : the mcgraw company has the following information availablemonth budgeted salesjune 68000july 72000august 74000september

Why does the concept of market efficiency with respect to : why does the concept of market efficiency with respect to information have no necessary relation to the quality of

What is clean surplus accounting what is its role in : what is clean surplus accounting? what is its role in linking dividends and abnormal

The photographic analogy for a balance sheet is a snapshot : the photographic analogy for a balance sheet is a snapshot and for the income statement and the statement of cash

Prepare a cost comparison for replacing the old equipment : company is considering the replacement of equipment used in operations. the following data are availableold equipment

Company has a joint process which produces three products : company has a joint process which produces three products called a b and c. each product may be sold at split-off or

Clints stonework corporation was organized on january 1 : preparing a statement of retained earningsclints stonework corporation was organized on january 1 2011. for its first

Comment on the following statement the residual income : comment on the following statement the residual income model is no different from the dividend discount model.

A corporation adopted the doalr value lifo method of : a corporation adopted the doalr value lifo method of inventory valuation on dec 31 2011. its inventory at that date was

User Account

All Pages