Xinhong Company is considering replacing one of its manufacturing machines. The machine has a book value of $41,000 and a remaining useful life of four years, at which time its salvage value will be zero. It has a current market value of $51,000. Variable manufacturing costs are $33,500 per year for this machine. Information on two alternative replacement machines follows. Alternative A Alternative B
Cost $122,000 $119,000
Variable manufacturing costs per year 22,200 10,100
Calculate the total change in net income if Alternative A, B is adopted. Should Xinhong keep or replace its manufacturing machine? If the machine should be replaced, which alternative new machine should Xinhong purchase?