Replace Equipment A machine with a book value of $80,000 has an estimated five year life. A proposal is offered to sell the old machine for $50,500 and replace it with a new machine at a cost of $75,000. The new machine has a five year life with no residual value. The new machine would reduce annual direct labor costs from $11,200 to $7,400. a. Prepare a differential analysis dated April 11 on whether to continue with the old machine (Alternative 1) or replace the old machine (Alternative 2). If an amount is zero, enter *o". Use a minussion to indicate subtracted or negative numbers or a loss Differential Analysis Continue with Old Machine (Alt. 1) or Replace Old Machine (Alt. 2) April 11 Continue with Old Machine Replace Old Machine Differential Effect on Income (Alternative 1) (Alternative 2) (Alternative 2) Revenues Proceeds from sale of old machine Costs Purchase price Direct labor (5 years) Income (Loss) in b. Should the company continue with the old machine (Alternative 1) or replace the old machine (Alternative 2)