Splish Compary is considering the purchase of a new machine. The imvice price of the machine is $$154,000,$ freight charges are

estimated to be $$4,000,$ and installation costs are expected to be $$7,000.$ The salvagevalue of the new eauipment is expected to be

zero after a useful life of $5$ years. The company could retain the existing equipment and use it for an additional $5$ years if it doesn't

purchase the new machine At that time, the equipment's salvagevalue would be zero. If Splish purchases the new machine now, it

would have to serap the existing machine. Splish's accountant, Carol Garoia, has accumulated the following data for annual sales and

expenses, with and without the naw machine:

Without the new machine, Splish can sell $13,000$ units of product annually at a per$-$unit selling price of $$100.$ If it purchases

the new machine, the number of units produced and sold would increse by $10\%,$ and the selling price would remain the

same.

The new machine is fastar than the ald machine, and it is more affecient in its use of materials. With the old machine, the

gross profit rate is $25\%$ of sales, wheress the rate will be $30\%$ of $s$ les with the new machine.

Annual selling expenses are $$199,000$ with the current machine. Because the new machine would produce a greater

number of units to be sald, annual selling expenses are ecpected to increase by $10\%$ if it is purchased.

Annual administrative expenses are expected to be $$110,000$ with the old machine, and $$124,000$ with the new machine.

The current bookvalue of the existing machine is $$40,000.$ Splish uses straight$-$line depreciation.

Prepare an incremental analysis for the four years that shows whather Solish should retain the existing machine or buy the new one.

$($lanars income tax effects.$)($If an amount reduces the net income then enter with a negative sign preceding the number or parenthesis, e$.$g$.$

$-15,000,(15,000).$ Enter all other amounts as positive and subtract where necessary. Do not leave any answer field blank. Enter $0$ for amounts.$)$