Business, 29.10.2019 01:31 madisonwaton07

Widgets inc. is thinking about replacing a piece of manufacturing equipment with a remaining useful life of three years and a $0 estimated salvage value. the book value of the equipment is $25,000, and the machine could be sold in its current condition for $7,000. the new machine would cost $83,000 and would have no salvage value at the end of its three-year useful life. with the new machine, widgets' variable operating costs would drop from $189,500 to $169,900 per year. if widgets opts to buy the new machine,
a. its total net income for the next three years would be $31,200 lower than with the current machine.
b. its total net income for the next three years would be $17,200 higher than with the current machine.
c. its total net income for the next three years would be $58,800 higher than with the current machine.
d. its total variable operating costs for the next three years would be $58,800 lower than with the current machine.

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