2) INSTRUCTION

REQUIRED

Gutenberg Publishers Inc. is considering replacing a machine that has been used in its factory for 4 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 bet affected by purchas of the now machine. 1. Prepare a differential analysis as of November 30 comparing operations using the present machine (Alternative 1) with operations using the new machine (Alternative 2hithe analysis should indicate the total differential profit. that vould result over the 6 -year period if the new machine is acquired. If an amount is zero. enter if i". If required, use a minus sign to indicate a loss. 2. Identify the factor that needs to be considered for asset replacement decision in a company. a. The quality of the machine and its working capacity b. The federal taxes payable c. The amount of investment required to replace or purchase the new machine d. All the above