d$)$ Imagine a company that owns a machine that was purchased five years ago for $$50,000.$

The machine is currently being considered for replacement with a newer model that costs

$$70,000.$ The current machine has a book value of $$10,000$ and a market value of $$5,000.$

Operating the old machine costs $$15,000$ per year in maintenance, while the new machine

would only cost $$5,000$ per year.

Required:

Identify whether the original purchase price of the current machine is relevant or irrelevant in

the decision to replace it$.$ Justify your answer. $($ THIS IS FOR COST AND MANAGEMENT ACCOUNTING SUBJECT, PLEASE DO THE CALCULATION$)$

$(6$ marks$)$

$($Total $15$ Marks$)$