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Nabisco Co . has a labeling machine with a book value of $ 1 0 0 , 0 0 0 and a remaining 5 -

Nabisco Co. has a labeling machine with a book value of $100,000 and a remaining 5-year useful
life, at which time the salvage value will be zero. A new machine is available at a cost of
$135,000. Nabisco will receive an $80,000 credit for trading in the old machine. The new
machine will reduce variable manufacturing costs by $12,000 annually for 5 years.
Should the old labeling machine be replaced with the new labeling machine?
Complete an incremental analysis to using an Excel worksheet to explain which
alternative is more profitable.

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