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Scrat [10]
2 years ago
8

Kahn Company paid $240,000 to purchase a machine on January 1, Year 1. During Year 3, a technological breakthrough resulted in t

he development of a new machine that costs $300,000. The old machine costs $100,000 per year to operate, but the new machine could be operated for only $36,000 per year. The new machine, which will be available for delivery on January 1, year 3, has an expected useful life of four years. The old machine is more durable and is expected to have a remaining useful life of four years. The current market value of the old machine is $80,000. The expected salvage value of both machines is zero.
Required
Calculate the total avoidable costs in keeping the old machine and buying a new machine. Should the machine be replaced?
Business
1 answer:
Serga [27]2 years ago
4 0

Answer:

Yes, the machine should be replaced

Explanation:

The calculation is given below:

<u> Particulars              old Machine            New machine </u>

Purchase price                                       $300,000

Less:

Salvage value                                        -$80,000

Operating cost         $400,000              $144,000

                          ($100,000 × 4 )        ($36,000 × 4)

Total cost                 $400,000                $364,000

Hence, the financial advantage is

= $400,000 - $364,000

= $36,000

As there is a financial advantage of $36,000 therefore the old machine would be replaced with the new machine

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2 years ago
The GDP deflator for this year is calculated by dividing the using by the using and multiplying by 100. However, the CPI reflect
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Hello. You forgot to provide the answer options. The options are:

"A) value of all goods and services produced in the economy this year  B) This years prices  C) value of all foods and services produced in the economy this year  D) the base year's prices  E) bought by consumers"

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The GDP deflator for this year is calculated by dividing the  value of all goods and services produced in the economy this year using this years prices by the value of all foods and services produced in the economy this year using the base year's prices and multiplying by 100. However, the CPI reflects only the prices of all goods and services bought by consumers.

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6 0
2 years ago
Suppose that a delivery company currently uses one employee per vehicle to deliver packages. Each driver delivers 60 packages pe
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Answer:

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b. Now suppose that a union forces the company to place a supervisor in each vehicle at a cost of $300 per supervisor per day. The presence of the supervisor causes the number of packages delivered per vehicle per day to rise to 60  packages per day What is the MRP per supervisor per day? By how much per vehicle per day do firm profits fall after supervisors are introduced?

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c. How many packages per day would each vehicle have to deliver in order to maintain the firm's profit per vehicle after supervisors are introduced?

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