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 $$340,000.$ The old machines presently have a book value of $$134,000$ and a market value of $$26,000.$ They are expected to have a five$-$year remaining life and zero salvage value. The new machines would cost the company $$240,000$ and have operating expenses of $$17,000$ a year. The new machines are expected to have a five$-$year useful life and no salvage value. The operating expenses associated with the old machines are $$44,000$ a year. The new machines are expected to increase quality, justifying a price increase and thereby increasing sales revenue by $$24,000$ a year. Select the true statement.

Multiple Choice

The company will be $$41,000$ better off over the $5$ year period if it replaces the old equipment.

The company will be $$42,000$ better off over the $5$ year period if it replaces the old equipment.

The company will be $$26,000$ better off over the $5$ year period if it replaces the old equipment.

The company will be $$68,000$ better off over the $5$ year period if it keeps the old equipment.