6. A company is considering replacing an old piece of machinery, which cost $600,000 and has $368,900 of accumulated depreciation to date, with a new machine that has a purchase price of $535,600. The old machine could be sold for $246,000. The annual variable production costs associated with the old machine are estimated to be $59,600 per year for eight years. The annual variable production costs for the new machine are estimated to be $20,600 per year for eight years.

Required:

A.

Prepare a differential analysis dated April 29 to determine whether to continue with (Alternative 1) or replace (Alternative 2) the old machine. Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. Be sure to complete the statement heading. For those boxes in which you must enter subtracted or negative numbers use a minus sign. If there is no amount or an amount is zero, enter "0". A colon (:) will automatically appear if required.

Score: 0/93 Differential Analysis Continue with Old Machine (Alternative 1) or Replace Old Machine (Alternative 2) (Label) Continue with Replace Old Old Machine Machine (Alternative 1) (Alternative 2) 1 Differential Effect on Income (Alternative 2) 2 3 (Label) 4 5 (Label) 6 7 8 9