Flint Tooling Company is considering replacing a machine that has been used in its factory for $4$ 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

New Machine

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

Required:

Prepare a differential analysis as of November $8$ to determine whether to Continue with Old Machine $($Alternative $1)$ or Replace Old Machine $($Alternative $2).$ The

analysis should indicate the differential profit that would result over the $6-$year period if the new machine is acquired. If an amount is zero, enter zero $"0".$ For those

boxes in which you must enter subtracted or negative numbers use a minus sign.

Differential Analysis

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

November $8$

Revenues

Proceeds from sale of old machine $

$

Costs

What other factors should be considered before a final decision is reached?

a$.$ 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 machine?

c$.$ Are there any improvements in the quality of work turned out by the new machine and what opportunities are available for the use of the funds required to purchase

the new machine?

d$.$ What affect would this decision have on employee morale?

e$.$ None of these choices is correct.