This item is one item in a multi-part relevant cost analysis problem and uses the data provided. Sowakaki Company is considering disposing of an old machine that has a book value of $48,000. It can be sold now for $6,000. If kept, it can be used for eight more years with a zero salvage value at the end of those eight years. A new machine costs $360,000, has an eight year life, and a disposal value of $18,000 at the end of eight years. Annual cash operating costs are $120,000 for the old machine and $90,000 for the new machine. In performing a relevant cost analysis for this scenario, the net advantage to the company (in dollars) for performing the analysis correctly and selecting the appropriate decision alternative is:

Please show how you get the below answer

Correct Answer

$96,000