Xinhong Company is considering replacing one of its manufacturing machines. The machine has a book value of $43,000 and a remaining useful life of 5 years, at which time its salvage value will be zero. It has a current market value of $53,000. Variable manufacturing costs are $33,700 per year for this machine. Information on two alternative replacement machines follows. Cost Variable manufacturing costs per year Alternative A $ 117,000 22,500 Alternative B $ 119,000 10,500 Calculate the total change in net income if Alternative A is adopted. (Cash outflows should be indicated by a minus sign.) ALTERNATIVE A: INCREASE OR (DECREASE) IN NET INCOME Cost to buy new machine $ (117,000) Cash received to trade in old machine 53,000 Reduction in variable manufacturing costs Total change in net income $ (64,000) Calculate the total change in net income if Alternative B is adopted. (Cash outflows should be indicated by a minus sign.) ALTERNATIVE B: INCREASE OR (DECREASE) IN NET INCOME Cost to buy new machine $ (119,000) Cash received to trade in old machine 53,000 Reduction in variable manufacturing costs Total change in net income $ (66,000) Should Xinhong keep or replace its manufacturing machine? If the machine should be replaced, which alternative new machine should Xinhong purchase? Keep the manufacturing machine Alternative A Alternative B