Tesla management are trying to decide whether to keep an older piece of machinery or buy a replacement. Management was

presented with the following information to assist in their decision:

A machine purchased three years ago for $$309,000$ has a current book value using straight$-$line depreciation of $$193,000$; its

operating expenses are $$39,000$ per year. A replacement machine would cost $$230,000,$ have a useful life of eleven years, and would

require $$11,000$ per year in operating expenses. It has an expected salvage value of $$62,000$ after eleven years. The current disposal

value of the old machine is $$73,000$; if it is kept eleven more years, its residual value would be $$18,000.$

Required

Calculate the total costs in keeping the old machine and purchase a new machine. Should the old machine be replaced?