# Jääskinen Oy has just today paid for and installed a special machine for polishing cars at one of…

Jääskinen Oy has just today paid for and installed a special machine for polishing cars at one of its several outlets. It is the first day of the company’s fiscal year. The machine cost€20 000. Its annual operating costs total €15 000, exclusive of depreciation. The machinewill have a four-year useful life and a zero terminal disposal price.After the machine has been used for a day, a machine salesperson offers a different machine that promises to do the same job at a yearly operating cost of €9000, exclusive of depreciation. The new machine will cost €24 000 cash, installed. The ‘old’ machine is unique and can be sold outright for only €10 000, minus €2000 removal cost. The new machine, like the old one, will have a four-year useful life and zero terminal disposal price.Sales, all in cash, will be €150 000 annually, and other cash costs will be €110 000 annually, regardless of this decision.For simplicity, ignore income taxes, interest and present-value considerations.Required1 a Prepare a statement of cash receipts and disbursements for each of the four years under both alternatives. What is the cumulative difference in cash flow for the four years taken together?b Prepare income statements for each of the four years under both alternatives. Assume straight-line depreciation. What is the cumulative difference in operating profit for the four years taken together?c What are the irrelevant items in your presentations in requirements (a) and (b)? Why are they irrelevant?2 Suppose the cost of the ‘old’ machine was €1 million rather than €20 000. Nevertheless, the old machine can be sold outright for only €10 000, minus €2000 removal cost. Would the net differences in requirements 1 and 2 change? Explain.3 ‘To avoid a loss, we should keep the old machine.’ What is the role of book value in deci- sions about replacement of machines?

## Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
\$26
The price is based on these factors:
Number of pages
Urgency
Basic features
• Free title page and bibliography
• Unlimited revisions
• Plagiarism-free guarantee
• Money-back guarantee
On-demand options
• Writer’s samples
• Part-by-part delivery
• Overnight delivery
• Copies of used sources
Paper format
• 275 words per page
• 12 pt Arial/Times New Roman
• Double line spacing
• Any citation style (APA, MLA, Chicago/Turabian, Harvard)

# Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

### Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

### Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

### Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.