Sweet Wave Bakery has a machine that is continuing to break down and requires constant maintenance. The operations manager is estimating that this machine has only $2$ more years of life. The machine produces an average of $50$ units per day at a cost of $$6\mathrm{.}50$ per unit. The bakery is considering replacing this machine with a similar machine. The new machine would cost $$55,000$ with a $2$ year life but could produce twice the production of the existing machine. The units sell for $$8\mathrm{.}50.$ Sweet Wave operates the line with this machine $260$ days each year. The sales are equal to production on this line.

Instructions:

Given the information above, what are the consequences of Sweet Wave replacing the maching that is slowing down production because of breakdowns?

Revenues $($Retain$)$: Sell price x units per day x $260$ days x $2$ years

Production Costs $($Retain$)$: Cost per unit x units per day x $260$ days x $2$ years

Revenues $($Replace$)$: Sell price x Units per day $($x$2)$ x $260$ days x $2$ years

Production Costs $($Replace$)$: Cost per unit x Units per day $($x$2)$ x $260$ days x $2$ years