Xinhong Company is considering replacing one of its manufacturing machines. The machine has a book value of $35,000 and a remaining useful life of five years, at which time its salvage value will be zero. It has a current market value of $45,000. Variable manufacturing costs are $33,600 per year for this machine. Information on two alternative replacement machines follows.

Alternative ACost - $121,000

Alternative B Cost - $118,000

Variable manufacturing costs per year Alt A -$22,800Alt B - $10,800

Calculate the total change in net income if Alternative A, B is adopted. Should Xinhong keep or replace its manufacturing machine? If the machine should be replaced, which alternative new machine should Xinhong purchase?

Alternative A

Cost to buy new machine -

Cash Received to trade in old machine -

Reduction in variable manufacturing costs -

Total change in net income -

Alternative B

Cost to buy new machine -

Cash Received to trade in old machine -

Reduction in variable manufacturing costs -

Total change in net income -