Kingbird Company has a factory machine with a book value of $164,000 and a remaining useful life of 4 years. A new machine is available at a cost of $248,500. This machine will have a 4-year useful life with no salvage value. The new machine will lower annual variable manufacturing costs from $600,000 to $503,000.
Prepare an analysis that shows whether Kingbird should retain or replace the old machine. (If an amount reduces the net income then enter with a negative sign preceding the number or parenthesis, e.g. -15,000, (15,000).)
Keep
Equipment Replace
Equipment Net Income
Increase
(Decrease) Variable costs $enter a dollar amount $enter a dollar amount $enter a dollar amount New machine cost enter a dollar amount enter a dollar amount enter a dollar amount $enter a total amount $enter a total amount $enter a total amount The old factory machine should be select an option replacedretained.