Whispering Winds Company is considering the purchase of a new machine. The invoice price of the machine is $115,000, freight charges are estimated to be $3,000, and installation costs are expected to be $5,000. The saivage value of thenew equipment 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. it doesn't purchase the new machine. At that time, the equipment's salvage value would be zero. If Whispering Winds purchases the new machine now, it would have to scrap the existing machine. Whispering Winds's accountant, Elizabeth Brown, has accumulated the following data for annual sales and expenses, with and without the new machine: 1. Without the new machine, Whlspering Winds can sell 10,000 units of product annually at a per-unit seiling price of $100. If it purchases the new machine, the number of units produced and sold would increase by 10 , and the selling price would remain the same. 2. The new machine is faster than the old machine, and it is more efficient in its use of materials With the old machine, the gross profit rate is 25% of sales, whereas the rate will be 30% of sales with the new machine. 3. Arnual selling expenses are $148,000 with the current machine. Alecause the new machine woxkd product a grater number of units to be sotd, innual selling expenses are expected to incresse by tox if it is purchased. 4. Annual administrative expenses are expected to be 582,000 with the old machine, and $53,000 with the now etachine 5. The current book value of the existing machine is $30,000. Whispering Winds uses straight-line depreciation Prepare an incremental analysis for the five years that shows whether Whispering Wiods should retain the existing machine or buy the Ofor omounts) Keep Old Machine Sales Less costs: Cost of goods sold Selling Administrative Operating income Buy New Machine Sales Less costs: Cost of goods sold Selling Administrative Operating income Replace Old Net income Retain Old Machine Increase (Decrease) Machine