Question: Gull Corp. is considering selling its old popcorn machine and replacing it with a newer one. The old machine has a book value of $5,000,

Gull Corp. is considering selling its old popcorn machine and replacing it with a newer one. The old machine has a book value of $5,000, and its remaining useful life is 5 years. Annual costs are $4,000. A high school is willing to buy it for $2,000. New equipment would cost $18,000 with annual operating costs of $1,500. The new machine has an estimated useful life of 5 years.

Should the machine be replaced?explain why?

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