Chapter 25 Homework (Application) ook Show Me How Machine Replacement Decision A company is considering replacing an old piece of machinery, which cost 3501.200 and has $349,000 of comte depreciation to date with a new machine that has a purchase price of $486,100. The old mach could be sold for $54,900. The annual variable production costs associated with the old machine arestimated to be $155.200 per year for eight years. The annual variable production costs for the new machine are estimated to be $102,400 per year for eight years. a.1 Prepare a trential analysis dated May 23 to determine whether to continue with tomative 1) or replace (Aternative 2) the old machine an amount is zero, entero", recuired, use a minus sign te Indicate a loss Differential Analysis Continue with Old Machine (AR. 1) or Replace Old Machine (A2) May 29 Continue Replace with Old Old Differential Machine Machine Effects (Alternative 1) (Alternative 2) (Alternative 2) Revenues Proceeds from sale of aid machine Costs: Purchase price Variable productions cos (years) 5 Profit (Los) Cone with the old machine Replace the old machine te with (Alternative 1) or replace (Alternative 21 the old machine h. What the unkost in ustion Check My Work on Check My Worker Previous Noe) Assignment Ser: 20% Submitment for Grading b. What is the sunk cost in this situation? The sunk cost is Check My Work more Check My Work uses remaining Assignment Score: 20%