Franklin 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:

Old Machine
Cost of machine, ten-year life	$108,200
Annual depreciation (straight-line)	10,820
Annual manufacturing costs, excluding depreciation	39,300
Annual nonmanufacturing operating expenses	12,500
Annual revenue	95,500
Current estimated selling price of the machine	36,500
New Machine
Cost of machine, six-year life	$136,200
Annual depreciation (straight-line)	22,700
Estimated annual manufacturing costs, exclusive of depreciation	17,800

Annual nonmanufacturing operating expenses and revenue are not expected to be affected by purchase of the new machine.

1. Prepare a differential analysis as of November 8 comparing operations using the present machine (Alternative 1) with operations using the new machine (Alternative 2). The analysis should indicate the total differential Income that would result over the slx-year period If the new machine is acquired. If an amount is zero, enter "o", Use a minus sign to Indicate subtracted amounts, negative amounts, or a loss. Differential Analysis Continue with Old Machine (Alt. 1) or Replace Old Machine(Alt. 2) November 8 Continue with Old Machine (Alternative 1) Replace Old Machine (Altematve 2) Differential Effect on Income (Alternative 2) Revenues Proceeds from sale of old machine Purchase price Annual manufacturing costs (6 yrs.) Income (Loss) 2. What other factors should be considered before a final decision is reached? a. Are there any improvements in the quality of work turned out by the new machine? b. What opportunitiles are available for the use of the funds required to purchase the new machine? c. Are there any improvements in the quality of work turned out by the new machine and what opportunities are available for the use of the funds required to purchase the new machine? d. What affect would this decision have on employee morale? e. None of these choices are correct