managerial accounting

Question 3 (Retain or Replace Equipment) Chudrick Company has a factory machine with a book value of $180,000 and a remaining useful life of five years A new machine is available at hood of $300,000. This machine will have a five year useful life with no salvage value The new machine will lower annual variable manufacturing costs from $700,000 to $550,000 Prepare an analysis that shows whether Chudsick should retain or replace the old machine [5 marks]