25. Homework 1 Saved 15 QS 25-15 (Algo) Keep or replace LO P5 1.31 points Rory Company has an old machine with a book value of $81,000 and a remaining five-year useful life. Rory is considering purchasing a new machine at a price of $109,000. Rory can sell its old machine now for $65,000. The old machine has variable manufacturing costs of $39,000 per year. The new machine will reduce variable manufacturing costs by $15,600 per year over its five-year useful life. (a) Prepare a keep or replace analysis of Income effects for the machines. (b) Should the old machine be replaced? eBook Complete this question by entering your answers in the tabs below. Hint Required A Required B Print Prepare a keep or replace analysis of income effects for the machines. References Keep or Replace Analysis Keep Replace Income Increase (Decrease) if replaced $ 0 s 65,000 Revenues Sale of existing machine Costs Purchase of new machine Variable manufacturing costs Income (loss) s 0 78,000 109,000 78,000 $ ( Required A Required B >