Chudzick Company has a factory machine with a book value of $159,000 and a remaining useful life of 5 years. A new machine is available at a cost of $246,500. This machine will have a 5-year useful life with no salvage value. The new machine will lower annual variable manufacturing costs from $603,500 to $499,000. 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, e.g. -15,000, (15,000).)

Chudzick Company has a factory machine with a book value of $159,000 and a remaining useful life of 5 years. A new machine is available at a cost of $246,500. This machine will have a 5-year useful life with no salvage value. The new machine will lower annual variable manufacturing costs from $603,500 to $499,000. 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, e.g. -15,000, (15,000).) Keep Equipment Replace Equipment Net Income Increase (Decrease) $ $ $ Variable costs New machine cost $ $ $ The old factory machine should be