Company X has an existing machine which is straight line depreciated to process its invoices. Following information pertains to this machine.

Item Amount Unit

Existing machine original cost 100,800 TL

Existing machine total useful life 4 years

Existing machine remaining useful life 3 years

Existing machine operating cost pa 105,100 TL

Existing machine salvage value 50,500 TL

The company is considering replacing this machine with a new one. New machine will cost TL170,000 and will have 3 years useful life. Per annum operating costs of the new machine are TL80,050. Determine if the company should retain or replace the existing machine ignoring the time value of money. Note enter 1 if the machine is retained, enter 2 if the machine is replaced.