A company is considering replacing an old piece of machinery, which cost $$600,000$ and has $$351,700$ of accumulated depreciation to date, with a new machine that has a purchase price of $$483,000.$ The old machine could be sold for $$61,100.$ The annual variable production costs associated with the old machine are estimated to be $$155,600$ per year for $8$ years. The annual variable production costs for the new machine are estimated to be $$98,600$ per year for $8$ years.

a$.$ Prepare a differential analysis dated April $29$ to determine whether to Continue with Old Machine $($Alternative $1)$ or Replace Old Machine $($Aiternative $2).$ If an amount is zero, enter $"0".$ For those boxes in which you must enter subtracted or negative numbers use a minus sign.

Differential Analysis

Continue with Old Machine $($Alt$.1)$ or Replace Old Machine $($Alt$.2)$

April $29$

$\backslash$table$[[$April $29],[,,\backslash$table$[[$Continue$],[$with Old$],[$Machine$],[($Alternative $1)]],\backslash$table$[[$Replace$],[$Old$],[$Machine$],[($Alternative $2)]],\backslash$table$[[$Differential$],[$Effects$],[($Alternative $2)]]],[$Revenues:$],[$Proceeds from sale of old machine,$$,$$$,!],[$Costs:$],[$Purchase price$],[$Variable productions costs $(8$ years$),,,],[$Income $($Loss$),,$$$,$$