Savannah Industries Ltd. is considering the replacement of existing machinery with some new, more efficient equipment. The supplier's price on the new equipment has been quoted at $84,000. The existing machinery could be sold to a competitor for price of $9,000 now. However, if not sold, it could be expected to continue operating for another 10 years with an immediate capital upgrade of $15,000. The unamortized cost of this old machine now is $27,000 The new equipment with the latest in technological advances will perform essentially the same operations as the older machine but will affect cost savings of $17,500 per year in labor and materials. The new equipment is also estimated to last 10 years, at which time it could be salvaged for $11,500. The installation and testing costs for the new equipment are expected to be $4,000. Due to the unique nature of the new equipment, an inventory of spare parts must be maintained at all times for immediate potential use, over its life. The cost of this is estimated at $5,200. Savannah has a tax rate of 30 percent, and its cost of capital is 15 percent. For accounting purposes. uses straight line amortization, and the required CCA rate Is 20 percent . Should Savannah Industries keep the existing machinery , or replace it with the new equipment ? Show full details for steps to support your conclusions