Mountain Gear has been using the same machines to make its name$-$brand clothing for the last five years. A cost efficiency consultant has suggested that

production costs may be reduced by purchasing more technologically advanced machinery. The old machines cost the company $$420,000.$ The old

machines presently have a book value of $$142,000$ and a market value of $$34,000.$ They are expected to have a five$-$year remaining life and zero salvage

value. The new machines would cost the company $$320,000$ and have operating expenses of $$19,000$ a year. The new machines are expected to have a

five$-$year useful life and no salvage value. The operating expenses associated with the old machines are $$52,000$ a year. The new machines are expected

to increase quality, justifying a price increase and thereby increasing sales revenue by $$32,000$ a year. Select the true statement.

Multiple Choice

The company will be $$84,000$ better off over the $5$ year perlod if it keeps the old equipment.

The company will be $$34,000$ better off over the $5$ year perlod if it replaces the old equipment.

The company will be $$50,000$ better off over the $5$ year perlod if It replaces the old equipment.