12)

Xinhong Company is considering replacing one of its manufacturing machines. The machine has a book value of $42,000 and a remaining useful life of 5 years, at which time its salvage value will be zero. It has a current market value of $52,000. Variable manufacturing costs are $33,700 per year for this machine. Information on two alternative replacement machines follows.

	Alternative A	Alternative B
Cost	$	115,000		$	116,000
Variable manufacturing costs per year		22,600			10,700

Calculate the total change in net income if Alternative A is adopted.(Cash outflows should be indicated by a minus sign.)

Calculate the total change in net income if Alternative B is adopte