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 $303,000 has a current book value using straight-line depreciation of $191,000; its operating expenses are $39,000 per year. A replacement machine would cost $228,000, have a useful life of eleven years, and would require $12,000 per year in operating expenses. It has an expected salvage value of $71,000 after eleven years. The current disposal value of the old machine is $83,000; if it is kept eleven more years, its residual value would be $20,000. Required Calculate the total costs in keeping the old machine and purchase a new machine. Should the old machine be replaced? Keep Old Machine Purchase New Machine Total costs Should the old machine be replaced? Yes