Machine Replacement Decision Creekside Products Inc. is considering replacing an old piece of machinery, which cost $2,349,000 and has $1,377,000 of accumulated depreciation to date, with a new machine that costs $1,765,800. The old machine could be sold for $279,000. The annual variable production costs associated with the old machine are estimated to be $854,300 for six years. The annual variable production costs for the new machine are estimated to be $580,900 for six years. a. Determine the total and annualized differential income or loss anticipated from replacing the old machine. Net differential income $ Annual differential income b. What is the sunk cost in this situation? the book value of the present equipment