Replace Equipment A machine with a book value of $248,500 has an estimated six-year life. A proposal is offered to sell the old machine for $217,000 and replace it with a new machine at a cost of $283,600. The new machine has a six-year life with no residual value. The new machine would reduce annual direct labor costs from $50,500 to $40,400. a. Prepare a differential analysis dated April 11 on whether to continue with the old machine (Alternative 1) or replace the old machine (Alternative 2). If an amount is zero, enter "0". If required, use a minus sign to indicate a loss Differential Analysis Continue Old Machine (Alt. 1) or Replace Old Machine (Alt. 2) April 11 Continue Replace Differential with Old old Effects Machine Machine (Alternative 1) (Alternative 2) (Alternative 2) Revenues: Proceeds from sale of old machines 0 $ 217,000 217.100 Costs: Purchase price Direct labor (6 years) 0 -283,600 -283,600 241,800 Profit (Loss) s b. Should the company continue with the old machine (Alternative 1) or replace the old machine (Alternative 2)? Continue with the old machine