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Kingbird Company is considering the purchase of a new machine. The invoice price of the machine is $146,000, froight charges are estimated to be $4,000,

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Kingbird Company is considering the purchase of a new machine. The invoice price of the machine is $146,000, froight charges are estimated to be $4,000, and installation costs are expected to be 56,000 The salvage value of the new equipment is expected to be zero after a useful life of 5 years. The company could retain the existing equipment and use it for an additional 5 years if it doesn't purchase the new machine. At that time, the equipment's salvage value would be zero. If Kingbird purchuses the new machine naw, it would have to scrap the existing machine. Kingbird's accountant, Helen Martin, has accumulated the following data for annual sales and expenses, with and without the new machine: 1 Without the new machine. Kingbird can sell 12,000 units of product annually at a per-unit selling price of $100. if it purchases the new muchine, the number of units produced and sold would increase by 10%, and the selling price would remsin the same. 2. The rew machine is faster than the old machine, and it is more efficient in itsuse of materiaks. With the old machine, the gross profit rate is 25% of sales, whereas the rate will be 300% of sales with the new machinc. 3: Annual selling expenses are $187,000 with the current machine, Because the new machine would produce a greater number of units to be sold, annual selling expenses are expected to increase by 10 sif it is purchased. 4. Annual administrative expenses are expected to be $104,000 with the old machine, and $118.000 with the new machine. 5. The current book value of the existing machine is $37,000. Kingbird uses straight-line depreciation. Prepare an incremental ans/ysis for the five years that shows whether Kingbird should retain the existirg machine or buy the new one. (lgnore income taxeffects.) af an amount reduces the net income then enter with a negative sign precedins the number or parenthesis, eg -15,000, (15,000). Enter afl other amounts as posithe and subtract where necessary. Do not leave any answer field blank. Enter ofor amounts)

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