A machine purchased three years ago for $319,000 has a current book value using straight-line depreciation of $183,000; its operating expenses are $39,000 per year. A replacement machine would cost $230,000, have a useful life of nine years, and would require $11,000 per year in operating expenses. It has an expected salvage value of $64,000 after nine years. The current disposal value of the old machine is $75,000; if it is kept 9 more years, its residual value would be $15,000.

Calculate the total costs in keeping the old machine and purchase a new machine. Should the old machine be replaced?

--------------------------------------------------	Keep Old Machine	Replace with New Machine
Total Costs
Should the old machine be replaced?		------------------------------------
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(there is no cost of capital included in the full question):

A machine purchased three years ago for $319,000 has a current book value using straightline depreciation of $183,000; its operating expenses are $39,000 per year. A replacement machine would cost $230,000, have a useful life of nine years, and would require $11,000 per year in operating expenses. It has an expected salvage value of $64,000 after nine years. The current disposal value of the old machine is $75,000; if it is kept 9 more years, its residual value would be $15,000. Required Calculate the total costs in keeping the old machine and purchase a new machine. Should the old machine be replaced