Exercise 6-18A (Algo) Asset replacement decision LO 6-5 A machine purchased three years ago for $315,000 has a current book value using straight-line depreciation of $193,000; its operating expenses are $33,000 per year. A replacement machine would cost $223,000, have a useful life of ten years, and would require $8,000 per year in operating expenses. It has an expected salvage value of $82,000 after ten years. The current disposal value of the old machine is $90,000; if it is kept 10 more years, its residual value would be $17,000. Required Calculate the total costs in keeping the old machine and purchase a new machine. Should the old machine be replaced? Keep Old Machine Purchase New Machine Total costs Should the old machine be replaced? $ 313,000 $ 131,000 Yes