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Differential Analysis for Machine Replacement Proposal Fontasia Printing Company is considering replacing a machine that has been used in its factory for 4 years. Relevant

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Differential Analysis for Machine Replacement Proposal Fontasia Printing 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 $76,000 7,600 20,100 Ost of machine, 10-year life Annual depreciation (straight line) Annual manufacturing costs, excluding depreciation Annual monmanufacturing operating expenses Annual revenue Ourrent estimated selling price of machine 5,200 63,400 25,500 New Machine Purchase price of machine, 5 year life Annual depreciation (straight-line) Estimated annual manufacturing costs, excuding depreciation $102,300 17,050 5,900 Annuainonmanufacturing operating expenses and revenue are not expected to be affected by purchase of the new mastine. Required: 1. Prepare a differential analysis as of April 30 to determine whether to continue with Old Machine Alternative l) or Replace Old Machine Alternative 2). The analyss should indicate the total differentis profit that would result over the G-year period if the new machine is acquired. If an amount is zera, enter zera "O". For these boxes in which you must enter subtracted or negative numbers use a minus sign. Differential Analysis Continue with Old Machine (Alt. 1) or Replace Old Machine (Alt. 2) April 30 Continue with Replace Old Differential Effects Haching Old Machine (Alternative 2) (Alternative 1) (Alternative 2) Revenues: Proceeds from sale of old machine Costs: Purchase price Annual manufacturing code (6 yrs.) Profit Class)

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