Chapter 11 Team Assignment #3

Chapter 11 Team - X 600,000 X = $3,180,000 3(500 – 140 X – 2,700,000 =(500 – 80 X –(4,200,000 600,000(360 X – 2,700,000 =(420 X –

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Chapter 11 Team Assignment #3 1) Upgrade OI = (SP – VC)(units over 3 years) – One time equip costs = (500 – 140)(18,000) – 2,700,000 = $3,780,000 Replace OI = (SP – VC)(units over 3 years) – (one time equip costs + disposal costs) = (500 – 80)(18,000) – (4,200,000 + 600,000) = $2,760,000 2) 3,780,000 = (SP – VC)(units over 3 years) – (one time equip costs + disposal costs) 3,780,000 = (500 – 80)(18,000) – (
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Unformatted text preview: X + 600,000) X = $3,180,000 3) (500 – 140) X – 2,700,000 = (500 – 80) X – (4,200,000 + 600,000) (360) X – 2,700,000 = (420) X – 4,800,000 (60) X = 2,100,000 X = 35,000 units = production and sales level where managers are indifferent b/w alternatives i) Upgrade if production and sales level < 35,000 units ii) Replace if production and sales level > 35,000 units...
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This note was uploaded on 05/26/2011 for the course ACCT 5100 taught by Professor Bamber during the Spring '08 term at University of Georgia Athens.

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