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Tesla management are trying to decide whether to keep an older piece of machinery or...

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Accounting

Tesla management are trying to decide whether to keep an older piece of machinery or buy a replacement. Management was
presented with the following information to assist in their decision:
A machine purchased three years ago for $314,000 has a current book value using straight-line depreciation of $176,000; its
operating expenses are $35,000 per year. A replacement machine would cost $223,000, have a useful life of nine years, and would
require $12,000 per year in operating expenses. It has an expected salvage value of $71,000 after nine years. The current disposal
value of the old machine is $83,000; if it is kept nine more years, its residual value would be $10,000.
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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