Xinhong Company is considering replacing one of its manufacturing machines. The machine has a book value of $42,000 and a remaining useful life of five years, at which time its salvage value will be zero. It has a current market value of $52,000. Variable manufacturing costs are $33,300 per year for this machine. Information on two alternative replacement machines follows.

	Alternative A				Alternative B
Cost	$	122,000			$	111,000
Variable manufacturing costs per year		22,500				10,500

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?

Calculate the total change in net income if Alternative A is adopted. (Cash outflows should be indicated by a minus sign.)

Calculate the total change in net income if Alternative B is adopted. (Cash outflows should be indicated by a minus sign.)