the problem 9-37 from financial accouting book by datar and rajan needs to be worked out. can you provide the answers to the blank boxes ? ATTACHMENT PREVIEW Download attachment Practice P9-37.xlsx SHAMROCK MANUFACTURING Facts: Old machine historical cost Old machine current book value Remaining useful life of asset (2 years) Annual depreciation straight-line depreciation method Market value Salvage value at end of useful life $150,000 New equipment 60,000 Useful life of new equipment (2 years) $30,000 Annual depreciation straight-line depreciation method $36,000 Annual reduction in direct MFG labor costs Annual reduction in electricity 0 Salvage value at end of useful life $90,000 $45,000 $15,000 $17,500 0 YEAR ONE #1 Cash operating costs Direct manufacturing costs Electricity Depreciation Loss on disposal of old machine Total costs New Equipment (replace) Old Equipment (keep) ($15,000) (17,500) 24,000 ($8,500) $0 Cost Difference by replacing ($15,000) (17,500) #VALUE! 24,000 #VALUE! Discuss #1 and #2 in the analytical section of your case analysis. YEAR TWO #2 Cash operating costs Direct manufacturing costs Electricity Depreciation Current disposal price of old machine Total relevant cash flow #3 New Equipment (replace) Old Equipment (keep) (35,000) (36,000) ($71,000) "WHAT IF" THE NEW MACHINE ONLY COST –>? WITH THE SAME 2 YEAR USEFUL LIFE 0 $0 Cash Outflow by replacing #VALUE! (35,000) #VALUE! (36,000) #VALUE! Note: The book value of the old machine $60,000 would be written off as depreciation over 2 years under the keep option, or all at once in the current year under replace option so net effect is the same, so it is irrelevant in this analysis $77,000 YEAR ONE New Equipment (replace) Cash operating costs Direct manufacturing costs Electricity Depreciation Loss on disposal of old machine Total costs Old Equipment (keep) (17,500) 24,000 $6,500 $0 Cost Difference by replacing #VALUE! (17,500) #VALUE! 24,000 #VALUE! Compare #1 and #2 to the "what if" results in #3 in the analytical section of your case analysis. YEAR TWO New Equipment (replace) Cash operating costs Direct manufacturing costs Electricity Depreciation Current disposal price of old machine Total relevant cash flow Old Equipment (keep) #VALUE! (36,000) #VALUE! 0 $0 Cash Outflow by replacing #VALUE! #VALUE! #VALUE! (36,000) #VALUE! In the conclusion section of your case analysis, in your opinion, what decision should be made?