A company owns a 5-year old turret lathe that has a book value of $20,000. The present market value of the lathe is $16,000. A new turret lathe can be purchased for $45,000. Using an outsiders point of view, what is the net first cost (cash flow) of keeping the old lathe? Justify your answer to get credit (there are not many calculations here). For example, mention what is sunk cost (if any), what is salvage value, etc....

(a) $29,000

(b) $45,000

(c) $20,000

(d) $16,000

Please show cash flow diagram and do not use excel functions.