Differential Analysis for Machine Replacement Proposal Lexigraphic Printing Company is considering replacing a machine that has been used in its factory for four 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: $89,000 Old Machine Cost of machine, 10-year life Annual depreciation (straight-line) Annual manufacturing costs, excluding depreciation Annual nonmanufacturing operating expenses Annual revenue Current estimated selling price of machine 8,900 23,600 6,100 74,200 29,700 $119,700 New Machine Purchase price of machine, six-year life Annual depreciation (straight-line) Estimated annual manufacturing costs, excluding depreciation 19,950 6,900 Annual nonmanufacturing operating expenses and revenue are not expected to be affected by purchase of the new machine. Required: 1. Prepare a differential analysis as of April 30 comparing operations using the present machine (Alternative 1) with operations using the Previous Check My Work Save and Exit Submit Assignment for Grading All work saved 1. Prepare a differential analysis as of April 30 comparing operations using the present machine (Alternative 1) with operations using the new machine (Alternative 2). The analysis should indicate the total differential profit that would result over the six-year period if the new machine is acquired. If an amount is zero, enter "O". Use a minus sign to indicate a loss. Differential Analysis Continue with (Alt. 1) or Replace (Alt. 2) Old Machine April 30 Continue Replace Differential Old Machine Old Machine Effect (Alternative 1) (Alternative 2) (Alternative 2) with Revenues: Proceeds from sale of old machine Costs: 29,745 X -29,745 X Purchase price 119,665 X 119,665 X Annual manufacturing costs (6 yrs.) 142,320 X 41.340 X -100,980 Profit (loss) 142,320 X 131,260 x -11.060 X Feedback 7 Check My Work 1. Determine the manufacturing costs to continue with the old machine for six years at the current amount. Determine the manufacturing costs with the replacement machine for six years. Determine the effect of the purchase price of the replacement Check My Work Previous All work saved Save and Exit Submit Assignment for Grading