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Equipment Repair Return Form BOC

Equipment Repair Return Form BOC

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Instructions and help about Equipment Repair Return Form BOC

management often has to decide whether to continue using an asset repair or replace it let's assume that Jeffcoat company has a factory machine that originally cost one hundred and ten thousand dollars it has a balance in accumulate depreciation of 70,000 so the machines Book value is forty thousand dollars it has a remaining life of four years the company is considering replacing this machine with a new machine the new machine cost one hundred and twenty thousand dollars it is expected to have a zero salvage value at the end of its four-year useful life if the new machine is acquired variable manufacturing costs are expected to decrease from one hundred and sixty thousand to one hundred and twenty-five thousand annually and the old unit could be sold for $5,000 the incremental analysis for the four year period is as follows in this case it would be to the company's advantage to replace the equipment the lower variable manufacturing cost due to the replacement more than

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