Rory Company has an old machine with a book value of $77,000 and a remaining five-year useful life. Rory is considering purchasing a new machine at a price of $104,000. Rory can sell its old machine now for $60,000. The old machine has variable manufacturing costs of $33,000 per year. The new machine will reduce variable manufacturing costs by $13,200 per year over its five-year useful life. (a) Prepare a keep or replace analysis of income effects for the machines. (b) Should the old machine be replaced? Required A Required B Prepare a keep or replace analysis of income effects for the machines. Income Increase Keep or Replace Analysis Keep Replace (Decrease) if replaced Revenues Sale of existing machine $ 60,000 Costs Purchase of new machine 104,000 Variable manufacturing costs Income (loss) Required A Required B Should the old machine be replaced? Should the old machine be replaced? Yes, it should be replaced Vi Yes, it should be replaced No, it should be kept