... 13 A factory is deciding to replace a machine with a new one. The machine with the same technology as the current machine has equivalent annual cost of $14782. The new machine will cost $70000 with annual operating cost of $330 and it has a 4 year life. Should the factory replace the current machine with a new machine if the discount rate is 6%? a) Yes, the firm should replace with a new machine because the new machine creates cost saving of 4516 b) No, the firm should not replace with a new machine because the new machine creates additional cost of 3696 No, the firm should not replace with a new machine because the new machine creates additional cost of 5749 d) No, the firm should not replace with a new machine because the new machine creates additional cost of 8623 e) No, the firm should not replace with a new machine because the new machine creates additional cost of 7597 f) No correct answer c)