A machine purchased three years ago for $308,000 has a current book value using straight-line depreciation of $182,000; its operating expenses are $38,000 per year. A replacement machine would cost $224,000, have a useful life of eleven years, and would require $9,000 per year in operating expenses. It has an expected salvage value of $80,000 after eleven years. The current disposal value of the old machine is $89,000; if it is kept 11 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?

	Keep Old Machine	Purchase New Machine
Total costs
Should the old machine be replaced?		Yes