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A machine purchased three years ago for $311,000 has a current book value using straight-line...

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Accounting

A machine purchased three years ago for $311,000 has a current book value using straight-line depreciation of $181,000; its operating expenses are $33,000 per year. A replacement machine would cost $238,000, have a useful life of eleven years, and would require $10,000 per year in operating expenses. It has an expected salvage value of $64,000 after eleven years. The current disposal value of the old machine is $74,000; if it is kept 11 more years, its residual value would be $18,000. Required Calculate the total costs in keeping the old machine and purchase a new machine. Should the old machine be replaced?

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