Xinhong company is considering replacing one of its manufacturing machines. the machine has a book value of $45,000 and a remaining useful life of 5 years, at which time its salvage value will be zero. it has a current market value of $52,000. variable manufacturing costs are $36,000 per year for this machine. information on two alternative replacement machines follows.

Explanation:

To Keep Old Machineinitial Cost$52,000 ( as Opportunity cost , if machine not sold

Alternative A$115,000

Alternative B   $125,000

I

Variable Cost for Five Years$180,000 [36000*5]

$95,000 [19000*5]

$75,000[15000*5]

Total Cost under  $232,000

Alternative A  $210,000

Alternative B   $200,000

1.Xinhong should replace the old machine as it has the highest cost among each alternative

2.Machine under alternative B should be purchased as it has the lowest cost in comparison between alternative A and B

answer; according to the ( irs );

income statement is prepared in order to show the profits and loss of a business. in order to prepare the income statement she should collect all the income and expenses of the product with the cost of production.