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Lance Weber manages the cutting depart ofSchulze Timber company He purchased a tree-cutting machine on January 2014, for $560,000. The machine had an estimated useful life of 5 years and zero development and the cost to operate $100,000 per year Technological developments resulted in the 25 of a more advanced machine available for purchase on January 1 2015, that would allow a percent reduction in operating costs. The new machine would cost $390,000 and have a 4-year useful life and zero salvage value. The current market value of the old machine on January 1, 2015, $300,000 and its book value is $448,000 on that date. is The Straight-line depreciation is used for both machines. company expects to generate S225,000 of revenue per year from the use of either machine. Required a-1. Calculate the total avoidable costs in keeping the old machine and replace with new machine. Decision Keep Old Replace With New Total avoidable costs 2. Should the old machine be replaced on January 1, 2015? Yes b. Prepare income statements for four years (2015 through 2018) assuming that the old machine is 2015 Total 2017 18 Depreciation expense O a