The old factory equipment was purchased four years ago for $$925,000.$ Over the last four years, your company has allocated depreciation based on the straight$-$line method. The expected salvage value is $$35,000.$ The current book value of the factory equipment is $$620,000.$ The operating expenses total approximately $$40,000$ a year. It is estimated that the residual value $($market value$)$ of the old machine is $$355,000.$

The CFO is contemplating whether to replace the piece of factory equipment. The replacement factory equipment would have a purchase price of $$520,000,$ a useful life of eight years, a salvage value of $45,000,$ and annual operating costs of $$35,000.$