Question

Sala company is contemplating the replacement of an old machine with a new one. If the old machine is replaced, it can be sold for $24,000. Based on the information provided, what is the net advantage (disadvantage) of replacing the old machine?

Answer 1

The net advantage (disadvantage) of replacing the old machine can be calculated by subtracting the cost of the new machine from the selling price of the old machine. If the cost of the new machine is less than the selling price, there would be a net advantage in replacing the old machine.

Step-by-step explanation:

The net advantage (disadvantage) of replacing the old machine can be calculated by subtracting the cost of the new machine from the proceeds obtained from selling the old machine. In this case, the net advantage would be the selling price of $24,000 minus the cost of the new machine. We would need the cost of the new machine to determine the net advantage accurately.

If the cost of the new machine is less than $24,000, then the net advantage would be positive, indicating an advantage to replace the old machine.