Havoc Industries is considering replacing a machine that is presently used in its production process. What would be the result of the differential analysis?

	Old Machine	Replacement Machine
Original cost	$55,000	$45,000
Remaining useful life in years	5	5
Current age in years	5	0
Book value	$33,000
Current disposal value in cash	$10,000
Future disposal value in cash (in 5 years)	$0	$0
Annual cash operating costs	$8,000	$4,000

($23,000)

$35,000

($15,000)

$15,000