Differential Analysis

Continue with Old Machine $($Alt$.1)$ or Replace Old Machine $($Alt$.2)$

May $4$

Continue with Replace Differential Effect

Old Machine Old Machine on Income

$($Alternative $1)($Alternative $2)($Alternative $2)$

Revenues:

Sales $(5$ years$)71,000105,70033,500$

Costs:

Purchase price $32,60042,30020,600$

Direct materials $(5$ years$)38,40063,40012,900$

Direct labor $(5$ years$)27,40042,80017,200$

Power and maintenance $(5$ years$)11,00020,600-4,300$

Taxes, insurance, etc. $(5$ years$)$

Selling and admin. expenses $(5$ years$)$

Income $($loss$)$