Sun T. Co. is contemplating the replacement of an old machine with a new one. The following information has been gathered:

Old Machine New Machine

Price $350,000 $685,000

Accumulated Depreciation 90,000 -0-

Remaining useful life 9 years -0-

Useful life -0- 9 years

Annual operating costs $225,000 $175,000 I

f the old machine is replaced, it can be sold for $32,000. Should Sun T. keep the old machine or replace it? Why - what is the net savings associated with your choice vs. the alternative?