Current Attempt in Progress Wildhorse Company is considering the purchase of a new machine. The invoice price of the machine is $132,000, freight charges are estimated to be $4,000, and installation costs are expected to be $6,000. Salvage value of the new equipment is expected to be zero after a useful life of 5 years. Existing equipment could be retained and used for an additional 5 years it the new machine is not purchased. At that time, the salvage value of the equipment would be zero. It the new machine is purchased now, the existing machine would have to be scrapped. Wildhorse's accountant, Lisah Huang, has accumulated the following data regarding annual sales and expenses with and without the new machine. 1. Without the new machine. Wildhorse can sell 11,000 units of product annually at a per unit selling price of 5100 if the new machine is purchased, the number of units produced and sold would increase by 10x, and the selling price would recmain the same. 2. The new machine is faster than the old machine, and it is more efficient in its usage of materials. With the old machine the gross profit rate will be 25% of sales, whereas the 3. Annual selling expenses are $169,000 with the current equipment, Because the new equipment would produce s pester number of units to be sold, annual selling expensel 4. Annual administrative expenses are expected to be $94,000 with the old mactine. and 5106,000 with the nev machine 5. The current book value of the existing machine is $34,000. Withorse uses straightetine deprectiation Costs and expenses Cost of goods sold Selling expenses Administrative expenses Purchase price Total costs and expenses Netincome