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Nguyen Company is contemplating the replacement of an old machine with a new one. The following information has been gathered: Old Machine New Machine $6,400

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Nguyen Company is contemplating the replacement of an old machine with a new one. The following information has been gathered: Old Machine New Machine $6,400 $4,000 Purchase price Accumulated depreciation $3,700 -0- Annual operating costs $4,300 $4,700 Remaining useful life 10 years 10 years if the old machine is replaced, it can be sold for $3,100. Both the old equipment and new equipment have a useful life of 10 years. What is the net advantage (disadvantage) of replacing the old machine with the new machine? $4,900 ($8,000) ($4,900) $8,000

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