Sheridan Timber Corporation uses a machine that removes the bark from cut timber. The machine is unreliable and results

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Sheridan Timber Corporation uses a machine that removes thebark from cut timber. The machine is unreliable and results in asignificant amount of downtime and excessive labor costs.Management is considering replacing the machine with a moreefficient one which will minimize downtime and excessive laborcosts. Data are presented below for the two machines:
Old Machine
New Machine
Original purchase cost
$387,600
$421,800
Accumulated depreciation
262,200
—
Estimated life
5 years
5 years
It is estimated that the new machine will produce annual costsavings of $96,900. The old machine can be sold to a scrap dealerfor $9,800. Both machines will have a salvage value of zero ifoperated for the remainder of their useful lives.Determine whether the company should purchase the newmachine. (Enter negative amounts using either anegative sign preceding the number e.g. -45 or parentheses e.g.(45). Do not leave any field blank. Enter 0 for theamounts.)
RetainEquipment
ReplaceEquipment
Net IncomeIncrease/(Decrease)
select an item Cost savingsNew machinecostProceeds from sale of old machineNet incremental netincomePurchase costAccumulated depreciation
$enter a dollar amount
$enter a dollar amount
$enter a dollar amount
select an item Cost savingsNew machinecostProceeds from sale of old machineNet incremental netincomePurchase costAccumulated depreciation
enter a dollar amount
enter a dollar amount
enter a dollar amount
select an item Cost savingsNew machinecostProceeds from sale of old machineNet incremental netincomePurchase costAccumulated depreciation
$enter a dollar amount
enter a dollar amount
enter a dollar amount
select a closing name Cost savingsNew machinecostProceeds from sale of old machineNet incremental netincomePurchase costAccumulated depreciation
$enter a total amount
$enter a total amount
$enter a total amount
The company select an option shouldshouldnot purchase the new machine.