Problem Set Don Williams is General manager of Carib Systems who received a proposal to replace the Version 1 with Version 2 Point of Sales (POS) equipment at the company

Subject:AccountingPrice:3.89 Bought10

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Problem Set Don Williams is General manager of Carib Systems who received a proposal to replace the Version 1 with Version 2 Point of Sales (POS) equipment at the company. Williams collects data about the proposal on Version 1 and Version 2 as follows: Version 1 POS Version 2 POS Original cost $425,000 $170,000 Useful life 5 years 3 years Current age 2 years O years 3 years 3 years Remaining useful life Accumulated depreciation $195,000 Current book value $230,000 Not purchased yet Not purchased yet Not purchased yet $120,000 Current disposal value (in cash) Final disposal value (in cash 3 years from now) Annual POS cash operating costs $0 $0 $60,000 $20,000 Annual revenues $1,250,000 $1,250,000 Annual non POS related operating costs $920,000 $920,000 Required: As the Management Accountant: 1. Compare the costs of Version 1 POS and Version 2 POS. Consider the cumulative results for the three years together, ignoring the time value of money and income taxes. (15 Marks) 2. Advise Mr. Williams on the factors that determine whether a revenue or cost item is relevant for management at Carib Systems and indicate whether he should accept the proposal.