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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

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 $301,000 has a current book value using straight-line depreciation of $181,000; its operating expenses are $35,000 per year. A replacement machine would cost $231,000, have a useful life of nine years, and would require $8,000 per year in operating expenses. It has an expected salvage value of $65,000 after nine years. The current disposal value of the old machine is $73,000; if it is kept nine more years, its residual value would be $19,000.

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