A machine with a book value of $129,710 has an estimated six-year life. A proposal is offered to sell the old machine for $89,570 and replace it with a new machine at a cost of $153,120. The new machine has a six-year life with no residual value. The new machine would reduce annual direct labor costs from $55,390 to $42,760.

Labels Costs Revenues Amount Descriptions Direct labor (6 years) Income (loss) Proceeds from sale of old machine Purchase price