The company purchase the new machine

Question 18 of 20 View Policies Current Attempt in Progress Sheridan TimberCorporation uses a machine that removes the bark from cut timber. The machine is unreliable and results in a significant amount ofdowntimeand excessive laborcosts. Management isconsidering replacingthe machine with a more efficient one which will minimize downtime and excessive labor costs. Data are presented below for the two machines: Original purchase cost Accumulated depreciation Estimated life Old Machine $312,800 211,600 5 years New Machine $340,400 5 years It is estimated that the new machine will produce annual cost savings of $78,200. The old machine can besold toa scrap dealer for $7,600 Both machines will have a salvage value of zero if operated for the remainder of their useful lives. Determine whether the company should purchase the new machine (Enter nqative amounts usirweither a nqativesign preceding the number e.g. 45 or parentheses e.g. (45). Do not leave any field blank. Enter Ofor the amounts.) The company Retain Equipment v purchase the new machine. Replace Equipment Net Income I ncrease/(Decr ease)