Machine Replacement Decision A company is considering replacing an old piece of machinery, which cost $597,700 and has $347,200 of accumulated depreciation to date, with a new machine that has a purchase price of $486,900. The old machine could be sold for $61,000. The annual variable production costs associated with the old machine are estimated to be $158,100 per year for eight years. The annual variable production costs for the new machine are estimated to be $99,000 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 Revenues: Proceeds from sale of old machine Costs: Purchase price Variable productions costs (8 years) Profit (Loss) Feedback Check My Work Partially correct Continue Replace Old with Old Differential Machine Machine Effects (Alternative 1) (Alternative 2) (Alternative 2) 0 0 X X a.2 Determine whether to continue with (Alternative 1) or replace (Alternative 2) the old machine.

Machine Replacement Decision A company is considering replacing an old plece of machinery, which cost $597,700 and has $347,200 of accumulated depreciation to date, with a new machine that has a purchase price of $486,900. The old machine could be sold for $61,000. The annual variable production costs associsted with the old machine are eatimated to be $158,100 per year for eight years. The annual variable production costs for the new machine are estimated to be $99,000 per year for elght years. a.1 Prepare a differential analysis dated May 29 to determine whether to continue with (Altemative 1) or replace (Alternative 2) the old machine. If an amount is zero, enter " 00. If required, use a minus sign to indicate a loss. Differential Analysis Continue with Old Machine (Alt. 1) or Reolaca nid Marhina rab. s)