Santosh Plastics Inc. purchased a new machine one year ago at a cost of $78,000. Although the machine operates well and has five more years of operating life, the president of Santosh Plastics is wondering if the company should replace it with a new electronic machine that has just come on the market. The new machine costs $117,000 and is expected to slash the current annual operating costs of $54,600 by twothirds. 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 $13,000 if the 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 $65,000 Less: Salvage value 13,000 Net loss from disposal $52,000 \"Even though the new machine looks good,\" said the president, \"we can't get rid of that 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 $273,000 per year, and selling and administrative expenses are expected to be $163,800 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.) 2. Compute the net advantage of purchasing the new machine using only relevant costs in your analysis. (Do not round intermediate calculations.) ::| 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