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:

The old machine was purchased three years ago for $$317,000$ and has a current book value using straight$-$line depreciation of $$184,000.$

The old machine incurs operating expenses of $$39,000$ per year.

The current disposal value of the old machine is $$87,000$; if it is kept ten more years, its remaining value would be $$12,000.$

The replacement machine would cost $$238,000$ and have a useful life of ten years.

The replacement machine has an expected salvage value of $$74,000$ after ten years.

The replacement machine would require $$13,000$ per year in operating expenses.

Required

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