Flint Tooling Company is considering replacing a machine that has been used in its factory for two years. Relevant data associated with the operations of the old machine and the new machine, neither of which has any estimated residual value, are as follows:

Annual nonmanufacturing operating expenses and revenue are not expected to be affected by purchase of the new machine.Instructions1. Prepare a differential analysis report as of May 22, 2010, comparing operations utilizing the new machine with operations using the present equipment. The analysis should indicate the differential income that would result over the six-year period if the new machine is acquired.2. List other factors that should be considered before a final decision is reached

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Old Machine $48,000 6,000 14,500 2,900 29,600 18,000 Cost of machine, eight-year life Annual depreciation (straight-line) Annual manufacturing costs, excluding depreciation Annual nonmanufacturing operating expenses Annual revenue Current estimated selling price of the machine New Machine $58,500 9,750 5,200 Cost of machine, six-year life Annual depreciation (straight-line) Estimated annual manufacturing costs, exclusive of depreciation