Example $2$:

Nabisco Co$.$ has a labeling machine with a book value of $$100,000$ and a remaining $5-$year useful

life, at which time the salvage value will be zero. A new machine is available at a cost of

$$135,000.$ Nabisco will receive an $$80,000$ credit for trading in the old machine. The new

machine will reduce variable manufacturing costs by $$12,000$ annually for $5$ years.

Should the old labeling machine be replaced with the new labeling machine?

Complete an incremental analysis to using an Excel worksheet to explain which

alternative is more profitable.