Dirferential Analysis Report for Machine Replacement Proposal FranklIn Printing Company Is consldering replacing a machine that has been used In Its factory for four years. Relevant data assoclated with the operations of the old machine and the new machine, nelther of which has any estlmated residual value, are as follows: Old Machina $107.400 LD,740 39,500 12,100 94,900 35,300 Cost of machine, 10-year life Annual dapraclatian (stralght-lina) Annual manufacturing costs, excluding depreciation Annual nonmanufacturing aperating expanses Annual revenue Currant estimated selling price of the machine New Machine $138,000 23,000 1B,100 10,000 Cost of mechine, six-yeer life Annual depreclation (stralght-line) Estimated annul manufacturing costs, exdluzive of deprecietion Annual nonmanufacturing operation excenses Annual nonmanufacturing operating expenses and revenue are not expected to be affected by purchase of the ne machine. Required: 1. Prepare a dfferential anelysis report co Paring operations utilizing he new machine with operations using tne ald m achine. The ana ysis should indicate the differenbal income that would result over the six year period if the new achine is acquired. Enter all amounts as positive numbars. Franklin Printing Company Proposal to Replace Machine Proceeds from sale of present machine Number ot years appicable 2. What ra some of the other factors that should ba considered bafora final dec sian Is mada? Are there any Improvements In the quality of work turned out by the new machlne? 2. Whet other opportunities are availeble for the use of the funds that ere required to purchsse the new machine? 3. What affact does the faderal Income tax have on the declalon? 4. What is the book value of the machine that will be replaced