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Bert Company is considering replacing a machine that is presently used in the production of...

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Accounting

Bert Company is considering replacing a machine that is presently used in the production of its product. The following data are available:

Replacement

Old Machine Machine

Original cost $57,000 $35,000

Useful life in years 17 5

Current age in years 12 0

Book value $39,000

Disposal value now $8,000

Disposal value in 5 years 0 0

Annual cash operating costs $7,000 $4,000

The difference in cost between keeping the old machine and replacing the old machine, ignoring income taxes, is _____the old machine.

A.

$37,000 in favor of replacing
B.

$22,000 in favor of replacing
C.

$12,000 in favor of keeping
D.

$22,000 in favor of keeping

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