Current Attempt in Progress

Sleek Looks has been using the same machines to make its name brand clothing for the last five years. A cost efficiency consultant has

suggested that production costs may be reduced by purchasing more technologically advanced machinery. The old machines cost the

company $$100,900.$ The old machines presently have a book value of $$60,000$ and a market value of $$6,000.$ They are expected to have

a five$-$year remalfing life and zero salvage value. The new machines would cost the company $$50,000$ and have operating expenses of

$$9,000$ a year. The new machines are expected to have a five$-$year useful life and no salvage value. The operating expenses associated

with the old machines are $$15,000$ a year. The new machines are expected to increase quality, justifying a price increase, and thereby

increasing sales revenue by $$5,000$ a year. Which of the following statements is true?

The company will be $$12\mathrm{.}000$ better off over the $5-$year period if it replaces the old equipment.

The company will be $$6,000$ better off over the $5-$year period if it replaces the old equipment.

The company will be $$20,000$ better off over the $5-$year period if it keeps the old equipment.

The company will be $$11,000$ better off over the $5-$year period if it replaces the old equipment.