Replace Equipment

year life with no residual value. The new machine would reduce annual direct labor costs from $$49,200$ to $$39,400.$

Differential Analysis

Continue $($Alt$.1)$ or Replace $($Alt$.2)$ Old Machine

June $2$

Revenues: $$

Proceeds from sale of old machine $

Costs:

Purchase price

Direct labor $(6$ years$)$

Profit $($loss$)$

: