Differential Analysis for Machine Replacement Proposal Flint Tooling Company is considering replacing a machine that has been used in its factory for 4 years. Relevant data associated with the operations of the old machine and the new machine, neither of which has any estimated residual value, are as follows: Old Machine Cost of machine, 10-year life $106,800 Annual depreciation (straight-line) 10,680 Annual manufacturing costs, excluding depreciation 37,700 Annual nonmanufacturing operating expenses Annual revenue 11,800 94,100 Current estimated selling price of the machine 36,400 New Machine Cost of machine, 6-year life Annual depreciation (straight-line) $136,200 22,700 Estimated annual manufacturing costs, exclusive of depreciation 18,800 Annual nonmanufacturing operating expenses and revenue are not expected to be affected by purchase of the new machine.