3) Mr. Jones is considering replacing one of the machines in the factory and seeks your advice. The following information is relevant; Purchase Price Salvage Value Estimated Useful Life Variable Operating Costs Fixed Operating costs Old Machine New Machine 252,000 50,000 380,000 50,000 6 Years 52,000 40,000 5 Years 15,000 6,000 The Old Machine was bought one year ago and has been depreciated using the straight line basis You are Required to report to Mr. Jones on: a) Whether there will be a gain or loss on the sale of the old machine. b) Whether the old machine should be replaced. 5 Marks 10 Marks