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 Cost of machine, 10-year life $76,000 Annual depreciation (straight-line) 7,600 Annual manufacturing costs, excluding depreciation 20,100 Annual nonmanufacturing operating expenses 5,200 Annual revenue 63,400 Current estimated selling price of machine 25,500 New Machine Purchase price of machine, 6-year life Annual depreciation (straight-line) $102,300 17,050 5,900 Estimated annual manufacturing costs, excluding depreciation Annual nonmanufacturing operating expenses and revenue are not expected to be affected by purchase of the new machine.