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A commercial oven with a book value of $$67,000$ has an estimated remaining $5-$year life. A proposal is offered to sell the oven for $$8,500$ and replace it with a new oven costing $$110,000.$ The new machine has a $5-$year life with no residual value. Annual maintenance costs for the old machine were $$54,000.$ The new machine would reduce annual maintenance costs by $$23,000.$

Provide a differential analysis on the proposal to replace the commercial oven. For those boxes in which you must enter subtracted or negative numbers use a minus sign.

Differential Analysis

Continue with Old Oven $($Alternative $1)$ or Replace Old Oven $($Alternative $2)$

Continue with

Old Oven

$($Alternative $1)$ Replace

Old Oven

$($Alternative $2)$ Differential

Effects

$($Alternative $2)$

Revenues:

Proceeds from sale of old oven fill in the blank $1$

fill in the blank $2$

fill in the blank $3$

Costs:

Purchase price fill in the blank $4$

fill in the blank $5$

fill in the blank $6$

Variable maintenance costs $(5$ years$)$ fill in the blank $7$

fill in the blank $8$

fill in the blank $9$

Total costs $fill in the blank $10$

$fill in the blank $11$

$fill in the blank $12$

Profit $($loss$)$ $fill in the blank $13$

$fill in the blank $14$

$fill in the blank $15$

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