Differential Analysis for Machine Replacement Proposal 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: Old Machine 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 $38,000 4.750 12,400 2.700 32,400 12.900 New Machine 557.000 Cost of machine, so year life Annual depreciation (straight-line) mated annual manufacturing costs exclusive of depreciation A r onmanufacturing operating expenses and revenue are not expected to be affected by Burchase of the machine Required: 1. Prepare a differential analysis as of November 8 comparing operations using the present machine (Alternative 1) with operations using the new machine (Alternative 2). The analysis should indicate the differential income that would result over the she-year period if the new machine is acquired. If an amount is zero, enter"O". Use a minus sign to indicate subtracted amounts, negative amounts, or a loss. Differential Analysis Continue with Old Machine (Alt. 1) or Replace Old Machine (Alt. 2) November Continue with Old Machine (Alternative 1) Replace Old Machine (Alternative 2) Differential effect on Income (Alternative 2) Revenues Proceeds from sale of old machine Purchase price Annual manufacturing costs (6 yrs.) Income (LOS) 2. What other factors should be considered before a final decisio .. Are there any improvements in the quality of work turned out by the new machine b. What opportunities are available for the use of the funds required to purchase the new c. Are there any improvements in the quality of work turned out by the machine and what opportunities are available for the use of the funds required to purchase the d. What effect would this decision have on employee morale? one of these choices are correct. machine