One of Eastvaco's business segments involves the manufacturing of laser printers. Each printer sells for $400. The profit margin on the printers have...

One of Eastvaco’s business segments involves the manufacturing of laser printers. Each printer sells for $400. The profit margin on the printers have not met the expectations of the Company’s CEO. He approaches the Plant Manager of the printer plant and asks for suggestions to improve the margin earned on printer sales. The Plant Manager explains to the CEO that increasing the sales price ($400) or sales quantity (50,000) is not possible in such a highly competitive market. Therefore, a reduction is cost may be the only possibility. The Plant Manager is aware of a new piece of specialized equipment that should reduce the amount of labor required to produce the printers. The Plant Manager has come to you to prepare a schedule evaluating the two alternatives of keeping the old machine or purchase the new machine. To complicate matters, the plant manager receives a bonus on operating income, beginning next year. The following is data relating to the two machines.Existing Machine