Check Fanning Moran manages the cutting department of Greene Finch Company. He purchased a tree cutting machine on January 1, year 2 for $400,000. The machine had an estimated useful life of 5 years and zero salvage value, and the cost to operate it is $88,000 per year. Technological developments resulted in the development of a more advanced machine available for purchase on January 1 year 3, that would allow a 20 percent reduction in operating costs. The new machine would cost $200,000 and have a 4-year useful life and zero salvage value. The current market value of the old machine on January 1, year 3, is $230,000, and its book value is $320.000 on that date. Straight-line depreciation is used for both machines. The company expects to generate $240,000 of revenue per year from the use of either machine. Required a. Recommend whether to replace the old machine on January 1 year 3 b. Prepare income statements for four years (year 3 through year 6) assuming that the old machine is retained. c. Prepare income statements for four years (year 3 through year 6) assuming that the old machine is replaced Complete this question by entering your answers in the tabs below