A new $420,000 machine is expected to have a 7-year life and a terminal value of zero. It can produce 20.000 units a year at a variable cost of S3 per unit. The variable cost is $6.00 per unit with an old machine, which has a book value of $154,000. It is being depreciated on a straight-line basis at $22,000 per year. It too is expected to have a terminal value of zero. Its current disposal value is also zero because it is highly specialized equipment . The salesperson of the new machine prepared the following comparison: (Click the icon to view the comparison.) He said, "The new machine is obviously a worthwhile acquisition. You will save $1.10 for every unit you produce." Read the requirements. Requirement 1. Do you agree with the salesperson's analysis? If not, how would you change it? Be specific. Ignore taxes. The salesman's analysis is faulty because it includes depreciation on the old equipment and bases total and unit costs on an annual volume of 20,000 units, which may not be accurate. If you do not agree with the salesperson's analysis, how would you change it? Data Table O A. A correct analysis would exclude variable costs and include the book value of the old machine. OB. A correct analysis would exclude depreciation on the both the new machine and the old machine. C. A correct analysis would utilize an expected volume (versus the new machine's capacity) and exclude the depreciation on the old machine OD. Not applicable. The salesperson's analysis is accurate. New Machine 20,000 Old Machine 20.000 Requirement 2. Prepare an analysis of total and unit differential costs if the annual volume is 10,000 units. (Leave unused cells blank. Enter unit $ New Machine Old Machine 60,000 $ 60,000 120,000 22,000 Variable costs Units Variable costs Straight-line depreciation Total cost Unit cost $ 120,000 $ 142,000 Straight-line depreciation 60000 $ 6.00 $ 7.10 Total cost 6.00 Unit cost Print Done Choose from any list or enter any number in the input fields and then click Check Answer. Requirement 3. At what annual volume would both the old and new machines have the same total relevant costs? The annual volume at which both the old and new machines have the same total relevant costs would be 4 units