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Replace Equipment year life with no residual value. The new machine would reduce annual direct...

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Accounting

Replace Equipment year life with no residual value. The new machine would reduce annual direct labor costs from $10,700 to $8,200.
This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below.
Open spreadsheet costs, losses, or negative differential effect on income.
Differential Analysis
Continue (Alt.1) or Replace (Alt.2) Old Machine
June 2
\table[[\table[[Continue with old],[Machine],[(Alternative 1)]],\table[[Replace old],[Machine]],\table[[Differential],[Effects]]],[(Alternative 2),(Alternative 2),]]
Revenues:
Proceeds from sale of old machine
Costs:
Purchase price
Direct labor (5 years)
Profit (Loss)
b. Should the company continue with the old machine (Alternative 1) or replace the old machine (Alternative 2)?
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