Rory Company has a machine with a book value of $117,000 and a remaining five-year useful life. A new machine is available at a cost of $121,500, and Rory can also receive $83,000 for trading in its old machine. The new machine will reduce variable manufacturing costs by $20,000 per year over its five-year useful life. Calculate the incremental income. (Any losses or outflows should be entered with a minus sign.) Answer is complete but not entirely correct. Incremental Income From Replacing Machine Reduction in variable manufacturing costs $ 100,000 Cost of new machine 121,500 Cash received from trade in of old machine 83,000 Book value of old machine x 117,000 X Incremental income (incremental cost) $ 421,500 Should the machine be replaced? Yes