calculate the annual worth of the presently owned machine if it is kept for more than 3 years? if it is kept for exactly 3 years

which is of thr following is the most economical option? Keep the machine and replace it in 3 years or replace the exisitng machine now?

A 3-year-old machine purchased for $540,000 is not able to meet today's market demands. The machine can be sold to a subcontracting company for $110,000 now. The current machine has an nnu al operating cost of $85,000 per year and a $30,000 salvage value in 3 years. If kept, the presently owned machine will be retained for only 3 more years, then replaced with a machine to be used in the manufacture of several other product lines. The replacement machine, which wi serve the company now and for at east 8 years, w cost $220,000. Its salvage value will be $50,000 for years 1 through 4 $20,000 after 5 years; and $10,000 thereafter. It will have an estimated operating cost of $65,000 per year. Perform an economic analysis at 15% per year using a 3-year planning horizon