### Incremental analysis and decision making

Assignment Help Accounting Basics
##### Reference no: EM13115338

Crone Enterprises uses a word processing computer to handle its sales invoices. Lately, business has been so good that it takes an extra 3 hours per night, plus every third Saturday, to keep up with the volume of sales invoices. Management is considering updating its computer with a faster model that would eliminate all of the overtime processing.

CURRENT MACHINE NEW MACHINE

Original purchase cost \$15,000 \$21,000

Accumulated depreciation 6,000 ----

Estimated operating costs 24,000 20,000
Useful life 5 years 5 years

If sold now, the current machine would have a salvage value of \$ 5,000. If operated for the remainder of its useful life, the current machine would have zero salvage value. The new machine is expected to have zero salvage value after 5 years.

Should the current machine be replaced? ( Ignore the time value of money ).

Make an incremental analysis for retaining or replacing equipment.

Please provide details for understand the exercise

#### Questions Cloud

 How long will it take : The reaction: 2 HI → H2 + I2, is second order and the rate constant at 800 K is 9.70 × 10-2 M-1 s-1. How long will it take for 8.00 × 10-2 mol/L of HI to decrease to one-fourth of its initial concentration. Cash disbursements for materials purchases : Streak Merchandising Company expects to purchase \$ 60,000 of materials in July and \$70,000 of materials in August. Three-quarters of all purchases are paid for in the month of purchase, Budgeted manufacturing overhead : Lewis Production is planning to sell 220 boxes of bricks and produce 200 boxes of bricks during May. Each box of bricks requires 20 pounds of brick mix and a half hour of direct labor. Why we call benzene phenyl and not benzyle : why we call benzene phenyl and not benzyle when one hydrogen is removed because in case of alkanes we name them alkyl on the removal of one hydrogen atom. Incremental analysis and decision making : Crone Enterprises uses a word processing computer to handle its sales invoices. Lately, business has been so good that it takes an extra 3 hours per night, plus every third Saturday, to keep up with the volume of sales invoices. Market share and concentration ratio : These top firms in industry C have market shares of 30, 25, 10 and 5% respectively. The top four firms in industry D have market shares of 15, 12, 8 and 4 % respectively. What is the temperature in degree celsius : a sample of gaseous SiH4 weighing 0.425g is placed in a 580 mL container. The resulting pressure is 0.61 atm.What is the temperature in degree celsius. Research specific fields of employment : What is an entry level position? What are other names of entry level positions? Is there more than one path one could take? What are the middle to upper level positions? Description of total profit : The Loebuck grocery sells milk. The grocer orders milk from a local farmer fro \$13 per case and sells for \$16 per case. Unsold cases are disposed for \$1.5 per case, and each case of shortage causes \$3.7 loss of profit.

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