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Lime company purchased a machinery paying $ 6 0 0 . 0 0 0 two years ago and decided to use straight line method of

Lime company purchased a machinery paying $600.000 two years ago and decided to use straight line method of depreciation. Economic life is estimated as 6 years with no salvage value. Company management is planning to buy a new machinery having the same function for $800.000. Economic life of the new machinery is estimated to be 4 years with no salvage value. If company decides to buy this machinery, it will increase the productivity and yearly total variable costs from 1.650.000 TL to 1.300.000 TL. Yearly sales revenue will remain same for four years 2.000.000 TL.
Required: Should company buy the new machinery?

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