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Woolrich Company's market research division has projected a substantial increase in demand over the next several years for one of the company's products. To meet this demand, the company will need to produce units as follows Production Year in Units 15,000 25,000 35,000 40,000 4-9 At present, the company is using a single model 2600 machine to manufacture this product. To increase its productive capacity, the company is considering two alternatives: Alternative 1. The company could purchase another model 2600 machine that would operate along with the one it now owns. he following information is available on this alternative: a. The model 2600 machine now in use was purchased for $180,000 four years ago. Its present book value is $100,000, and its present market value is $95,000. b. A new model 2600 machine costs $184,000 now. The old model 2600 machine will have to be replaced in five years at a cost of S204,000. The replacement machine will have a market value of about $140,000 when it is four years old. C. The variable cost required to produce one unit of product using the model 2600 machine is given under the "general information" below. d. Repairs and maintenance costs each year on a single model 2600 machine total $4,000. Alternative 2. The company could purchase a model 5200 machine and use the old model 2600 machine as standby equipment. The model 5200 machine is a high-speed unit with double the capacity of the model 2600 machine. The following information is available on this alternative: a. The cost of a new model 5200 machine is $254,000. b. The variable cost required to produce one unit of product using the model 5200 machine is given under the "general information" below. c. The model 5200 machine is more costly to maintain than the model 2600 machine. Repairs and maintenance on a model 5200 machine and on a model 2600 machine used as a standby would total $5,000 per year