Santosh Plastics Inc. purchased a new machine one year ago at a cost of $$120,000.$ Although the machine operates well and has five more years of operating life, the president of Santosh Plastics is wondering if the company should replace it with a new electronic machine that has just come on the market.

The new machine costs $$180,000$ and is expected to slash the current annual operating costs of $$84,000$ by two$-$thirds. The new machine is expected to last for five years, with zero salvage value at the end of five years. The current machine can be sold for $$20,000$ if the company decides to buy the new machine. The company uses straight$-$line depreciation.

In trying to decide whether to purchase the new machine, the president has prepared the following analysis:

$\backslash$table$[[$Book value of the old machine,$$100,000$