A company is considering replacing an existing machine with a new machine. Based on the information below, should the company keep or replace the existing machine?

$$

Existing Machine$$New Machine$$Book value$ $35,000$Purchase price$ $75,000$Variable manufacturing costs per year$ $10,000$Variable manufacturing costs per year$ $8,000$Salvage value$ $0$Selling price$ $40,000$Remaining useful life$5$ yearsUseful life$5$ years

$$

multiple choice

Keep the existing machine because the new machine will decrease overall income by $$25,000.$

Keep the existing machine because the new machine will increase overall income by $$25,000.$

Replace the existing machine because the new machine will decrease overall income by $$25,000.$

Replace the existing machine because the new machine will increase overall income by $$25,000.$

multiple choice

define the decision.

identify alternatives. Incorrect

select the course of action.

analyze and assess decisions made.