Replace Equipment year life with no residual value. The new machine would reduce annual direct labor costs from $$10,700$ to $$8,200.$

This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below.

Open spreadsheet costs, losses, or negative differential effect on income.

Differential Analysis

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

June $2$

$\backslash$table$[[\backslash$table$[[$Continue with old$],[$Machine$],[($Alternative $1)]],\backslash$table$[[$Replace old$],[$Machine$]],\backslash$table$[[$Differential$],[$Effects$]]],[($Alternative $2),($Alternative $2),]]$

Revenues:

Proceeds from sale of old machine

Costs:

Purchase price

Direct labor $(5$ years$)$

Profit $($Loss$)$

b$.$ Should the company continue with the old machine $($Alternative $1)$ or replace the old machine $($Alternative $2)?$