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Machine Replacement Decision A company is considering replacing an old piece of machinery, which cost $ 6 0 0 , 5 0 0 and has

Machine Replacement Decision
A company is considering replacing an old piece of machinery, which cost $600,500 and has $350,700 of accumulated depreciation to date, with a new machine that has a purchase price of $485,600. The old machine could be sold for $64,500. The annual variable production costs associated with the old machine are estimated to be $157,600 per year for 8 years. The annual variable production costs for the new machine are estimated to be $100,200 per year for 8 years.
a.1 Prepare a differential analysis dated December 10 to determine whether to continue with (Alternative 1) or replace (Alternative 2) the old machine. If an amount is zero, enter "0". If required, use a minus sign to indicate a loss.
Differential Analysis
Continue with (Alt.1) or Replace (Alt.2) Old Machine
December 10
\table[[December 10],[Line Item Description,\table[[Continue with],[Old Machine],[(Alternative 1)]],\table[[Replace Old Machine],[(Alternative 2)]],\table[[Differential Effects],[(Alternative 2)]]],[Revenues:],[Proceeds from sale of old machine,$,$,],[Costs:],[Purchase price],[Variable productions costs (8 years)],[Profit (loss),,$,$
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