Chudzick Company has a factory machine with a book value of $172,000 and a remaining useful life of 4 years. A new machine is available at a cost of $246,000. This machine will have a 4-year useful life with no salvage value. The new machine will lower annual variable manufacturing costs from $601.500 to $510,000. Prepare an analysis that shows whether Chudzick should retain or replace the old machine. (If an amount reduces the net income then enter with a negative sign preceding the number or parenthesis, eg.-15,000, (15,000).) Keep Equipment Replace Equipment Net Income Increase (Decrease) $ 2406000 2040000 Variable costs $ -366000 246000 172000 New machine cost 74000 2652000 2212000 $ -440000