Machine Replacement Decision A company is considering replacing an old piece of machinery, which cost $597,800 and has $352,800 of accumulated depreciation to date, with a new machine that has a purchase price of $483,400. The old machine could be sold for $61,800 The annual variable production costs associated with the old machine are estimated to be $157,500 per year for eight years. The annual variable production costs for the new machine are estimated to be $101,000 per year for eight years. a. Prepare a differential analysis dated April 29 to determine whether to continue with (Alternative 1) or replace (Alternative 2) the old machine. If an amount is zero, enter "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 Rep e Old Machine (Alt. 2) April 29 Revenues: Proceeds from sale of old machine Costs Purchase price Variable productions costs (8 years) Income (Loss) Continue with Old Machine Replace Old Machine. Differential Effect on Income (Alternative 1) (Alternative 2) (Alternative 2) 1000 0 000 3. For the continue and replace alternatives subtract the costs from the revenues. Multiply the variable production cost for the eight year life. Determine the revenues, costs, and income (loss) by subtracting alternative 1 from alternative 2 Determine whether to continue with (Alternative 1) or replace (Alternative 2) the old machine. Replace the old machine Feedback Check My Work Correct b. What is the sunk cost in this situation? The sunk cost is $ Foodback Check My Work Incorrect