Machine Replacement Decision A company is considering replacing an old piece of machinery, which cost $601,600 and has $352,500 of accumulated depreciation to date, with a new machine that has a purchase price of $483,500. The old machine could be sold for $61,300. The annual variable production costs associated with the old machine are estimated to be $157,200 per year for eight years. The annual variable production costs for the new machine are estimated to be $100,200 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. Feedback Check My Work a.2 Determine whether to continue with (Alternative 1) or replace (Alternative 2) the old machine. Check My Work Compare the differential revenues and differential costs 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 cost is $