Fint Tooling Company is consldering replacing a machine that has been used in its factory for two vears. Relevant data associased with the operations of the old machine and the new machine, neither of which has any estimated residual valuc, are as follows:

$\backslash$table$[[$Old Machine$],[$Cost of machine, eight$-$ytar life,$540,000],[$Annual depreciation $($ftraight line$),5,000],[$Annual manufacturing costs, excluding depreciation,$12,400],[$Annual nonmanufacturing operatingexpenses,$2,900],[$Annual revernue,$15,400],[$Current extimated selling price of the machine,$13,900],[,],[$New Machine$],[$Cost of machines, sheytar life,$$59,000],[$Annual depreclation $($straight line$),9\mathrm{.}500],[$Eatimated annual manufacturing cost, less deprecliation,$3\mathrm{.}900]]$

Annual non$-$manufactaring operating expenses and revenue are not expected to be affected by the purchase of the new machine.

Question $2$ Instructions

a$.$ Prepare a differential analysis as of November $8$ comparing operations using the present machine $($Alternative $1)$ with operations using the firw machine $($Aternative $2).$ The analyels thould indicate the differential income that would rewult over the sh$-$year period if the new machine is acquired.

b$.$ Ust other factors that should be considered before a final decision is reached.