13 14 1. Differential Analysis Continue with Old Machine (Alt. 1) or Replace with New Machine (Alt. 2) April 30 15 16 17 18 Differential Effect Continue with Old Machine Alternative 1)(Alternative 2 Replace Old Machine on Income (Alternative 2) 19 20 21 Revenues Proceeds from sale of old machine Costs: Purchase price Annual manufacturing costs (6 years) 23 24 25 26 27 28 Income (oss) The proposal to replace the machine should be 29 30 2 Key essay answer here 32 34 35 37 4Pr. 25-2A for machine replacement propus PR 25-2A Differential analysis Lexigraphic Printing Company is considering replacing a machine that has been its factory for four years. Relevant data associated with the operations of the old OBJ. old machine and the new machine, neither of which has any estimated residual value, are e Old Machine Cost of machine, 10-year life Annual depreciation (straight-line) Annual manufacturing costs, excluding depreciation Annual nonmanufacturing operating expenses Annual revenue Current estimated selling price of machine $89,000 8,900 23,600 6,100 74,200 29,700 New Machine Purchase price of machine, six-year life Annual depreciation (straight-line) Estimated annual manufacturing costs, excluding depreciation $119,700 19,950 6,900 nnual nonmanufacturing operating expenses and revenue are not expected to be affected y purchase of the new machine structions Prepare a differential analysis as of April 30 comparing operations using the present machine (Alternative 1) with operations using the new machine (Alternative 2). The analysis should indicate the total differential income that would result over the six-year period if the new machine is acquired. List other factors that should be considered before a final decision is reached