Replace Equipment A machine with a book value of $245,600 has an estimated six year lide. A proposal is offered to sell the old machine for $215,100 and replace it with a new machine at a cost of 5282,500. The new machine has a six-year life with no residual value. The new machine would reduce annual direct labor costs from $49,600 to $39,700 a. Prepare a differential analyse dated April 11 on whether to continut with the old machine (Alternative 1) or replace the old machine (Alternative 2). 16 an amount is zero, entero. Use a mission to Indicate subtracted or negative numbers or a loss Differential Analysis Continue with Old Machine (Alt. 1) or Replace Old Machine (Alt. 2) April 11 Continue with Old Machine (Alternative :) Replace Old Machine (Alternative 2) Differential Effect on Income (Alternative 2) Revenues Proceeds from sale of old machine Costs Purchase price Direct labor (years) Income (Lou Chat For the continue and replace alternatives subtract the costs from the revenues. Multiply the direct labor for the six yearfe Determine the differential effect on Income of the revenues, costs, and income (1) by subtracting alternative 2 from alternative Learning objective 1 b. Should the company continue with the machine (Alternative 1) or replace the old machine (Alternative 2) Continue with the old machine