Answer:
Xinhong should replace its manufacturing machine
Explanation:
                  Xinhong Company Alternative A
<em>                 </em><em>Increase or decrease in net income</em>
Particulars                                                          Amount
Cost to buy new machine                              -$124,000.00
Cash received to trade in old machine          $45,000.00
Reduction in variable manufacturing cost     <u>$46,800.00</u>
($33,800 - $22,100)*4
Total change in net income                           -<u>$32,200.00</u>
                    Xinhong Company Alternative B
<em>                  Increase or decrease in net income</em>
Particulars                                                          Amount
Cost to buy new machine                               -$115,000.00
Cash received to trade in old machine           $45,000.00
Reduction in variable manufacturing cost      <u>$92,400.00</u>
($33,800 - $10,700)*4
Total change in net income                            <u>$22,400.00</u>
<u>Conclusion</u>: Xinhong should replace the existing machine as incremental net income is high for the alternative.