Bonita company has a factory machine with a book value of $152,000 and a remaining useful life of 4 years. A new machine is available at a cost of $252,000. This machine will have a 4 year useful life with no salvage value. The new machine will lower annual variable manufacturing costs from $600,000 to $503,000.

Prepare an analysis that shows whether Bonita should retain or replace the old machine.