Machine Replacement Decision A company is considering replacing an old piece of machinery, which cost $600,800 and has $348,600 of accumulated depreciation to date, with a new machine that has a purchase price of $485,500. The old machine could be sold for $63,300. The annual variable production costs associated with the old machine are estimated to be $155,100 per year for eight years. The annual variable production costs for the new machine are estimated to be $101,100 per year for eight years a.1 Prepare a differential analysis dated May 29 to determine whether to continue with (Alternative 1) or replace (Alternative 2) the old machine. If an amount is zero, enter "0". If required, use a minus sign to indicate a loss. Differential Analysis Continue with Old Machine (Alt. 1) or Replace Old Machine (Alt. 2) May 29 Continue Replace with Old Old Differential Machine Machine effects (Alternative 1) (Alternative 2) (Alternative 2) Revenues Proceeds from sale of old machine 0 63,00 61,300 Costs Purchase price 4. SOO 45.500 Variable productions costs (8 years) 1.240.00 HOR,800 Profit (Loss) -1.240.800 - Lo, Feedback Check My Wor Check My Work 2 more Check My Work uses remaining Save and Exot Submit Assignment for Grading a.2 Determine whether to continue with (Alternative 1) or replace (Alternative 2) the old machine. Replace the old machine compare the interactin cevenues and inferential cost of continuing vs. replacing. Which one has the greatest positive differential effect on income? b. What is the sunk cost in this situation? The sunk costs Chad My Sunk costs are costs that have been incurred in the past, cannot be recouped, and are not relevant to Nature decisions Check My Won Partially correct Previous Next > Check My Work 2 more Check My Works remaining All work saved Save and Ex Submit Assignment for Grading