Replace equipment Instructions Labels and Amount Descriptions Differential Analysis Instructions Final Question A machine with a book value of $124,560 has an estimated six-year life. A proposal is offered to sell the old machine for $83,030 and replace it with a new machine at a cost of $162,900. The new machine has a six-year life with no residual value. The new machine would reduce annual direct labor costs from $56,930 to $41,400. Required: 1. Prepare a differential analysis dated February 18 on whether to continue with the old machine (Alternative 1) or replace the old machine (Alternative 2). Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or negative numbers use a minus sign. If there is no amount or an amount is zero, enter "0". A colon () will automatically appear if required 2. Should the company continue with the old machine (Alternative 1) or replace the old machine (Alternative 2)? Instructions Labels and Amount Descriptions Differential Instructions Labels and Amount Descriptions Ar $1 Labels Costs Revenues Amount Descriptions Direct labor (6 years) Income (loss) Proceeds from sale of old machine Purchase price X A propos e new r continue ns for th se a mi or rep Instructions Labels and Amount Descriptions Differential Analysis Final Question Instructions Labels and Amount Descriptions Differential Analysis 1. Prepare a differential analysis dated February 18 on whether to continue with the old machine (Alternative 1) or replace the old machine (Alternative 2). Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or negative numbers use a minus sign. If there is no amount or an amount is zero, enter "0". A colon () will automatically appear if required. Differential Analysis Continue with Old Machine (Alternative. 1) or Replace Old Machine (Alternative. 2) February 18 Continue with Old Machine (Alternative 1) Replace Old Machine (Alternative 21 Differential Effect on Income (Alternative 2) Instructions Labels and Amount Descriptions Differential Analysis Instructions Labels and Amount Descriptions Differential Analysis Final Question Final Question 1. an 2. Should the company continue with the old machine (Alternative 1) or replace the old machine (Alternative 2)? the Replace the old machine. The company is indifferent since the result is the same regardless of which alternative is chosen. Continue with the old machine. ive 2). Refe ve numbers