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Replace Equipment A machine with a book value of $251.200 has an estimated sx-year life. A proposal is offered to sell the old machine for

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Replace Equipment A machine with a book value of $251.200 has an estimated sx-year life. A proposal is offered to sell the old machine for $215.300 and replace it with a new machine at a cost of $282,800. The new machine has a six-year life with no residual value. The new machine would reduce annual direct labor costs from $51,000 to $40,800. Prepare a differential analysis dated February 18, on whether to continue with the old machine (Alternative 1) or replace the old machine (Alternative 2), If an amount is zero. enter zero "O". Use a minus sign to indicate a loss. Differential Analysis Continue with Old Machine (Alt. 1) or Replace Old Machine (Alt. 2) February 18 Continue with Old Machine (Alternative 1) Replace Old Machine (Alternative 2) Differential Effect on Income (Alternative 2) Revenues: Proceeds from sale of old machine 215,300 215.300 Costs: Purchase price 282,800 282,800 Di abor (6 years) 306, 244,800 61,200 312,300 X Income (Loss) 306,000 128,700 X Feedback Check My Work Follow Example Exercise 25-4, For the continue and replace alternatives subtract the costs from the revenues. Multiply the direct labor for the six year ife. Determine the diferental effect on income of the revenues, costs, and income (loss) by subtracting altemative 2 from atemative 1. Learning Objective 1 Check My Work Previous Next All work saved. Email Instructor Save and Exit Submit Assignment for Grading A W 4

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