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 $$314,000$ has a current book value using straight$-$line depreciation of $$176,000$; its

operating expenses are $$35,000$ per year. A replacement machine would cost $$223,000,$ have a useful life of nine years, and would

require $$12,000$ per year in operating expenses. It has an expected salvage value of $$71,000$ after nine years. The current disposal

value of the old machine is $$83,000$; if it is kept nine more years, its residual value would be $$10,000.$

Required

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