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5 Kenanga SpA has a factory machine with a book value of 100,000 and a...

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Accounting

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5 Kenanga SpA has a factory machine with a book value of 100,000 and a remaining useful life of 5 years. It can be sold for 30,000. A new machine is available at a cost of 400,000. This machine will have a 5-year useful life with no residual value. The new machine will lower annual variable manufacturing costs from 600,000 to 500,000. Prepare an analysis showing whether the old machine should be retained or replaced. Retain Replace Net Income (make the answer bold) (write your opinion whether Kenanga should retain or replace the old machine)

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