Replace Equipment value. The new machine would reduce annual direct labor costs from $$49,900$ to $$39,900.$

Differential Analysis

Continue $($Alt$.1)$ or Replace $($Alt$.2)$ Old Machine

June $2$

$\backslash$table$[[$Line Item Description,Continue with Old Machine $($Alternative$,\backslash$table$[[$Replace$],[$Old$],[$Machine$],[$Alternative$]],$Differential Effects $($Alternative $2)],[$Revenues:$],[$Proceeds from sale of old machine,$$,,$$$],[$Costs:$],[$Purchase price$],[$Direct labor $(6$ years$)],[$Profit $($loss$),,,]]$

b$.$ Should the company continue with the old machine $($Alternative $1)$ or replace the old machine $($Alternative $2)?$