Xu Company is considering replacing one of its manufacturing machines. The machine has a carrying amount of $36,000 and a remaining useful life of 4 years, at which time its residual value will be zero. It has a current market value of $46,000. Variable manufacturing costs are $33,800 per year for this machine. Information on two alternative replacement machines follows.

	Alternative A			Alternative B
Cost	$	117,000		$	113,000
Variable manufacturing costs per year		22,900			10,200

Calculate the total change in net profit if Alternative A is adopted. (Input all amounts as positive values, except cash outflows and any negative total change in net profit which should be indicated by a minus sign. Omit the "$" sign in your response.)

Alternative A: Increase or (Decrease) in Net Profit
Cost to buy new machine	$
Cash received to trade in old machine
Reduction in variable manufacturing costs
Total change in net profit	$

Calculate the total change in net profit if Alternative B is adopted. (Input all amounts as positive values, except cash outflows and any negative total change in net profit which should be indicated by a minus sign. Omit the "$" sign in your response.)

Alternative B: Increase or (Decrease) in Net Profit
Cost to buy new machine	$
Cash received to trade in old machine
Reduction in variable manufacturing costs
Total change in net profit	$

Should Xu keep or replace its manufacturing machine? If the machine should be replaced, which alternative new machine should Xu purchase?

	Keep the manufacturing machine
	Alternative B
	Alternative A