Bryan Inc. is considering replacing one of its older factory…

Bryan Inc. is considering replacing one of its older factory machines with a new machine.  Both the old and new machine have estimated remaining lives of 5 years, however the new machine is easier to operate. The company’s old machine cost $305,000 and has a current net book value of $180,000.  The direct labor costs needed to operate the machine is $40,000 per year. The old machine has no residual (salvage) value and is custom for Bryan Inc. so it cannot be sold to another company. A new machine costs $237,000 and requires direct labor costs of $6,000 per year. The new machine has an expected residual (salvage) value of $81,000 after five years. Should the company keep the old or purchase the new machine? Consider only the quantitative factors when making your decision.

Bryan Inc. is considering replacing some of its manufacturin…

Bryan Inc. is considering replacing some of its manufacturing equipment. Use this information to decide if the old machine should be replaced (or not): Existing Equipment: Cost  $257,000 Accumulated depreciation $150,000 Annual operating expenses (per year)  $39,000 Salvage value of equipment $15,000 Market value if equipment is sold $160,000 Remaining useful life 5 years New Equipment: Cost $280,000 Annual operating expenses (per year) $10,000 Salvage value $15,000 Useful life 5 years