The Plant department of the local telephone company purchased four special pole hole diggers eight years ago for $14,000 each. They have been in constant use to the present time. Due to an increased workload, it is considered that additional machines will soon be required. Recently it was announced that an improved model of the digger has been put on the market. The new machines have higher production rate and lower maintenance expense than the old machines, but their cost will be $32,000 each. The service life of the new machines is estimated to be 8 years with salvage estimated at $750 each. the four original diggers have an immediate salvage of $2,000 each and an estimated salvage of $500 each eight years hence. The estimated average annual maintenance expense associated with the old machines is approximately $1,500 each compared to $600 each for the new machines. A field study and trial indicates that the workload would require three additional new type machines if the old machines are continued in service. However, if the old machines are all retired from service, the present workload plus the estimated increased load could be carried by 6 new machines with an annual savings of $12,000 in operator costs. Because the new machines employ a new principle of operation, it is contrmplated that the special personnel-training program will be necessary before the machines can be placed in operation it is estimated that this training program will cost about $700 per new machine. if the MARR is 9% before taxes, what should the company do?

A) 6 new machines because they save/ cost $X per year. (find this amount X)

B)3 new machines and 4 old machines because they save/cost $X per year. (find this amount X)

C)Collect more information because with the given information, this problem cannot be solved.