110) The Malloy Corporation is contemplating the replacement of some old equipment. The pertinent information is as follows:


Old Equipment  Equipment 

Original cost$36,000$30,000

Useful life in years106

Current age in years40

Book value$24,000-

Disposal value now$17,500-

Disposal value in 6 years00

Annual cash operating costs$   9,000$   5,500

Required: Prepare a cost comparison of all relevant items for the next six years together. Ignore income taxes. Comment on the best alternative for The Malloy Corporation.

111) The Wamsley Company is thinking about replacing its existing fleet of delivery vans. The following information relates to this decision:

Old DeliveryReplacement

      Vans     Delivery Vans

Original cost$90,000$102,000

Useful life in years64

Current age in years20

Book value$60,000-

Disposal value now$62,000-

Disposal value in 4 years00

Annual cash operating costs$30,000$  20,000

Required: Ignoring income taxes, prepare a cost comparison of all relevant items for the next four years together. Include in your analysis the best choice for Wamsley Company and explain your

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *