=+Cost of machine, 10-year life $360,000 Annual depreciation (straight-line) 36,000 Annual manufacturing costs, excluding depreciation 325,000 Annual nonmanufacturing operating expenses 215,000 Annual revenue 740,000 Current estimated selling price of machine 210,000 New Machine Annual depreciation (straight-line)

Estimated annual manufacturing costs, exclusive of depreciation

$410,000 68,333 284,000