ghlin96
ghlin96
25.10.2019 • 
Business

Darcy roofing is faced with a decision. the company relies very heavily on the use of its 60-foot extension lift for work on large homes and commercial properties. last year, darcy roofing spent $79,200 refurbishing the lift. it has just determined that another $48,000 of repair work is required. alternatively, it has found a newer used lift that is for sale for $204,000. the company estimates that both lifts would have useful lives of 6 years. the new lift is more efficient and thus would reduce operating expenses by about $26,400 per year. darcy roofing could also rent out the new lift for about $12,000 per year. the old lift is not suitable for rental. the old lift could currently be sold for $30,000 if the new lift is purchased. prepare an incremental analysis showing whether the company should repair or replace the equipment.

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