Act 500 Module 10 Critical Thinking Assignment

Problem 1Kassel Corporation is considering trading a truck with a book value of SAR 80,000 with an estimated five-year life for a new truck that would cost SAR 200,000. The old truck could be sold for SAR 75,000. The new truck has a seven-year life with no residual value. The new truck would reduce annual operating costs by SAR 20,200 per year.Required:Prepare a differential analysis on whether to continue with the old machine (Alternative 1) or purchase the new machine (Alternative 2).Problem 2A condensed income statement by product line for Brion Sporting Goods indicated the following for Baseball Equipment for the past year:(All amounts in SAR)SalesCost of goods soldGross profitOperating expensesLoss from operationsIt is estimated that 15% of the cost of goods sold represents fixed factory overhead costs, and that 20% of the operating expenses are fixed. Because Almond Cookies is only one of the many products, the fixed costs will not be materially affected if the product is discontinued.Prepare a differential analysis to determine whether Baseball Equipment should be continued (Alternative 1) or discontinued (Alternative 2). Should Baseball Equipment be retained? Explain and indicate the dollar difference in favor or against.Problem 3Marburg Manufacturing produces various-sized plastic panels for its