A machine with a book value of $248,500 has an estimated six-year life. A proposal is offered to sell the old machine for $217,000 and replace it with a new machine at a cost of $283,600. The new machine has a six-year life with no residual value. The new machine would reduce annual direct labor costs from $50,500 to $40,400.

Prepare a differential analysis dated april 11 on whether to continue with the old machine (Alternative 1) or replace the old machine (Alternative 2). If an amount is zero, enter "0". For those boxes in which you must enter subtracted or negative numbers use a minus sign.

Should the company continue with the old machine (Alternative 1) or replace the old machine (Alternative 2)?