Machine Replacement Decision A company is considering replacing an old piece of machinery, which cost $600,900 and has $351,700 of accumulated depreciation to date, with a new machine that has a purchase price of $483,000. The old machine could be sold for $62,300. The annual variable production costs associated with the old machine are estimated to be $156,300 per year for eight years. The annual variable production costs for the new machine are estimated to be $99,100 per year for eight years, a. 1 Prepare a differential analysis dated May 29 to determine whether to continue with (Alternative 1) or replace (Alternative 2) the old machine. If an amount is zero, enter"0" If required, use a minus sign to indicate a loss. Differential Analysis Continue with Old Machine (Alt. 1) or Replace Old Machine (Alt. 2) May 29 Continue Replace with Old old Differential Machine Machine Effects (Alternative 1) (Alternative 2) (Alternative 2) Revenues Proceeds from sale of old machine 0 62,300 62,300 Costs 483,000 -483,000 Purchase price 591,000 99,100 x Vanable productions costs (8 years) Profit (Loss) Feedbad Check My Work Partially correct Proceeds from sale of old machine 0 62,300 62,300 Costs: Purchase price 0 483,000 -483,000 Variable productions costs (8 years) 591,000 X 99,100 x Profit (Loss) Feedback Check My Work Partially correct a.2 Determine whether to continue with (Alternative 1) or replace (Alternative the old mach Replace the old machine b. What is the sunk cost in this situation? The sunk cost is $ Feedback Check My Work Sunk costs are costs that have been incurred in the past, cannot be recouped, and are not relevant to