A machine purchased three years ago for $303,000 has a current book value using straight-line depreciation of $193,000; its operating expenses are $37,000 per year. A replacement machine would cost $221,000, have a useful life of ten years, and would require $10,000 per year in operating expenses. It has an expected salvage value of $74,000 after ten years. The current disposal value of the old machine is $84,000; if it is kept 10 more years, its residual value would be $12,000.

Q. Calculate the total costs in keeping the old machine and purchase a new machine.