Santosh Plastics Inc. purchased a new machine one year ago at a cost of $81,000. Although the machine operates well and has five more years ofoperating life, the president of Santosh Plastics is wondering if the company should replace it with a new electronic machine that hasjust come on the market. The new machine costs $121,500 and is expected to slash the current annual operating costs of $56,700 by two-thirds. The new machine is expected to last for five years, with zero salvage value at the end of five years. The current machine can be sold for $13,500 ifthe company decides to buy the new machine. The company uses straight-line depreciation. In trying to decide whether to purchase the new machine, the president has prepared the following analysis: Book value of the old machine $67,500 Less: Salvage value 13,569 Net: loss from disposal $543399 (E Even though the new machine looks good," said the president, \"we can't get rid ofthat old machine if it means taking a huge loss on it. We'll have to use the old machine for at least a few more years.\" Sales are expected to be $283,500 per year, and selling and administrative expenses are expected to be $1?0,100 per year. regardless of which machine is used. Required: 1. Prepare a comparative income statement covering the next five years, assuming: a. The new machine is not purchased. b. The new machine is purchased. [Negative amounts should be indicated by a minus sign. Do not round intermediate calculations] Required: 1. Prepare a comparative income statement covering the next five years, assuming: a. The new machine is not purchased. b. The new machine is purchased. [Negative amounts should be indicated by a minus sign. Do not round intermediate calculations} Total expenses 2. Compute the net advantage of purchasing the new machine using only relevant costs in your analysis. (Do not round intermediate calculations.) ::I 3. What is the minimum saving in annual operating costs that must be achieved in order for the president to consider buying the new machine