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A machine purchased three years ago for $304,000 has a current book value using straight-line depreciation of $176,000; its operating expenses are $33,000 per year.

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A machine purchased three years ago for $304,000 has a current book value using straight-line depreciation of $176,000; its operating expenses are $33,000 per year. A replacement machine would cost $220,000, have a useful life of ten years, and would require $12,000 per year in operating expenses. It has an expected salvage value of $68,000 after ten years. The current disposal value of the old machine is $80,000; if it is kept 10 more years, its residual value would be $17,000. Required Calculate the total costs in keeping the old machine and purchase a new machine. Should the old machine be replaced

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