College station bank paid $60,000 for a check sorting machine in January 2010. The machine at an estimated life of 10 years and annual operating cost of $55,000 excluding depreciation. Although management is please with the machine recent technological advances have made it obsolete. Consequently as of January 2014, the machine has a book value of $20,000 a remaining operating life of six years and is salvage value of zero dollars The manager of operations is evaluating a proposal to acquire a new optimal scanning and sorting machine. The new machine will cost $100,000 to reduce annual operating cost to $35,000 excluding depreciation because of expected technological improvements, the manager believes the new machine will have an economic life of six years and no salvage value at the end of that life. Prior to signing the papers authorizing the acquisition of the new machine, the President of the bank prepare the following analysis: Six-year savings ($55,000 -$35,000) x 6 years = $120,000 Cost of new machine ($100,000) Loss on disposal of old machine ($20,000) After looking at these numbers the manager rejected proposal and comment that he was tired of looking at marginal projects. This bank is in business to make a profit not to break even. If you want to break even go work for the government." Questions: A. Evaluate the presents analysis B. prepare a differential else is off switch your totals for the old and new machines C. speculate on some limitations of the model or other issues that might be a factor in making a final decision