A company is considering replacing an old piece of machinery, which cost $613,200 and has $332,700 of accumulated depreciation to date, with a new machine that has a purchase price of $545,050. The old machine could be sold for $230,800. The annual variable production costs associated with the old machine are estimated to be $59,550 per year for eight years. The annual variable production costs for the new machine are estimated to be $17,350 per year for eight years. Required: a. Prepare a differential analysis dated September 13 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. 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. Labels b. Determine whether the company should continue with (Alternative 1) or replace (Alternative 2) the old machine. Cash flows from investing activities c. What is the sunk cost in this situation? Costs Revenues a. Prepare a differential analysis dated September 13 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. For those boxes in Amount Descriptions which you must enter subtracted or negative numbers use a minus sign. If there is no amount or an amount is zero, enter "O". A colon () will Gain on sale of investments automatically appear if required. Income (loss) Loss on sale of investments Proceeds from sale of old machine Differential Analysis Purchase price Continue with (Alternative. 1) or Replace (Alternative. 2) Old Machine Variable production costs (8 years) September 13 Continue with Replace Old Differential Effect Old Machine Machine on Income 2 (Alternative 1) (Alternative 2) (Alternative 2) 3 (Label) 4 5 (Label) 6 7 8 b. Determine whether the company should continue with (Alternative 1) or replace (Alternative 2) the old machine. O Replace the old machine O Continue with old machine c. What is the sunk cost in this situation? Book value of the old machine O Cost of the new machine O Future variable production costs