Ridley company has a factory machine with a book value of

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Ridley Company has a factory machine with a book value of $86,400 and a remaining useful life of 6 years. A new machine is available at a cost of $218,200. This machine will have a 6-year useful life with no salvage value. The new machine will lower annual variable manufacturing costs from $610,700 to $369,800. Prepare an analysis showing whether the old machine should be retained or replaced. (If an amount reduces the net income for Increase (Decrease) column then enter with a negative sign preceding the number e.g. -15,000 or parenthesis, e.g. (15,000). Enter all other amounts in all other columns as positive and subtract where necessary.) Retain Equipment Replace Equipment Net 6-Year Income Increase (Decrease) Variable manufacturing costs $ $ $ New machine cost Total $ $ $ The old factory machine should be

Reference no: EM13581766

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