Earth Star Diamonds Inc began a potentially lucrative mining operation and is considering replacing their existing mining machine with a new state-of-the-art machine. Selected data includes:

	Existing Machine	New Machine
Original Cost (2 years ago)	$60,000
Purchase Price		$90,000
Selling Price if sold now (Salvage Value)	$13,400
Removal Cost if sold now	$1,400
Operating Costs per Year	$125,000	$105,000
Remaining Years of Useful Life	5	5
Salvage Value in 5 years	$0	$0

REQUIRED:

Compute the net advantage or disadvantage of buying the new machine and make a recommendation.