A company is considering replacing an old piece of machinery, which cost $599,900 and has $350,400 of accumulated depreciation to date, with a new machine that costs $484,500. The old equipment could be sold for $64,200. The annual variable production costs associated with the old machine are estimated to be $157,600 per year for eight years. The annual variable production costs for the new machine are estimated to be $102,500 per year for eight years.

a. Prepare a differential analysis dated October 3, 2012. If an amount is zero, enter zero "0".

Differential Analysis
Continue with Old Machine (Alt. 1) or Replace Old Machine (Alt. 2)
October 3, 2012
		Continue with Old Machine (Alternative 1)		Replace Old Machine (Alternative 2)		Differential Effect on Income (Alternative 2)
Revenues:
Proceeds from sale of old machine		$		$		$
Costs:
Purchase price
Variable productions costs (8 years)
Income (Loss)		$		$		$