Managerial Accounting: E20-14 Johnson Enterprises uses a computer to handle its sales invoices

Managerial Accounting 
Exercise 20-14 
Johnson Enterprises uses a computer to handle its sales invoices. Lately, business has been so good that it takes an extra 3 hours per night, plus every third Saturday, to keep up with the volume of sales invoices. Management is considering updating its computer with a faster model that would eliminate all of the overtime processing. 
Current Machine New Machine 
Original purchase cost 15,000 25,000 
Accumulated depreciation 6,000 - 
Estimated annual operating costs 25,000 20,000 
Useful life 5 years 5 years 

If sold now, the current machine would have a salvage value of $6,000. If operated for the remainder of its useful life, the current machine would have zero salvage value. The new machine is expected to have zero salvage value after 5 years. 

Required: 
a. Prepare an incremental analysis. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) 
b. Should the current machine be replaced?
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