hw25.4

Replace Equipment A machine with a book value of $250,900 has an estimated remaining life of 6 years. A proposal is offered to sell the old machine for $216,600 and replace it with a new machine at a cost of $282,000. The new machine has a 6 -year life with no residual value. The new machine would reduce annua) direct labor costs from $49,500 to $39,600. a. Prepare a differential analysis dated June 2 on whether to continue with the old machine (Alternative 1 ) or replace the old machine (Alternative 2 ). If an amount is zero, enter " 0 ". If required, use a minus sign to indicate a loss. b. Should the company continue with the old machine (Alternative 1) or replace the old machine (Alternative 2)