Facey Co is considering whether to retain or purchase a new forklift. The new machine will produce annual cost savings of $55.000 and $20,000 annually. The old machine can be sold to a scrap dealer for $24,000. Prepare an incremental analysis, and advise the company whether they should retain or replace the forklift. Information is outline below: Old Machine New Machine Purchase price 100.000 120,000 Depreciation $70.000 540.000 Book Value 60,000 120,000 Cost savings 20,000 55,000 Useful Life 4 4 salvage 24,000