Question: Flint Tooling Company is considering replacing a machine that has been used in its factory for four years. Relevant data associated with the operations of

Flint Tooling Company is considering replacing a machine that has been used in its factory for four 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, 10-year life $108,500
Annual depreciation (straight-line) 10,850
Annual manufacturing costs, excluding depreciation 38,200
Annual nonmanufacturing operating expenses 12,000
Annual revenue 95,900
Current estimated selling price of the machine 36,800
New Machine
Cost of machine, six-year life $135,600
Annual depreciation (straight-line) 22,600
Estimated annual manufacturing costs, exclusive of depreciation 19,200

Annual nonmanufacturing operating expenses and revenue are not expected to be affected by purchase of the new machine.

Required:

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1. Prepare a differential analysis as of February 28, 2014, comparing operations using the present machine (Alternative 1) with operations using the new machine (Alternative 2). The analysis should indicate the total differential income that would result over the six-year period if the new machine is acquired. If an amount is zero, enter zero "0".

Flint Tooling Company is considering replacing a machine that has been used

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