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A commercial oven with a book value of $25,090 has an estimated remaining five-year life. A proposal is offered to sell the oven for $7,840

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A commercial oven with a book value of $25,090 has an estimated remaining five-year life. A proposal is offered to sell the oven for $7,840 and replace it with a new oven costing $44,780. The new machine has a five-year life with no residual value. The new machine would reduce annual maintenance costs by $8,610. Provide a differential analysis on the proposal to replace the commercial oven. Annual maintenance cost reduction Number of years applicable Total differential decrease in cost Proceeds from sale of equipment Cost of new equipment Net differential decrease in cost from replacing equipment

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