Prepare a differential analysis report as of October 14,2012 comparing operations utilizing the new machine with operations using the present equipment. The analysis should indicate the differential income that would result over the eight- year period if the new machine is acquired.

List other factors that should be considered before a final decision is reached.

Old Machine

Cost of machine 10 year life 75,000

Annual depreciation straight line 7,500

Annual manufacturing costs, excluding depreciation 33,150

Annual nonmanfacturing operating expenses