Keep or Replace an Old Equipment. JAD is a manufacturing company producing cologne products. The cologne bottles undergo bar coding process using an old machine. The old machine uses liquid ink in the processing, the annual operational and maintenance cost is 10,000. The old machine has a depreciation cost of 2,000 per year. It is currently being depreciated using straight line depreciation, having a current book value of 6,000 with 3 years remaining useful life. The old machine frequently breaks down and disrupts the production process. An Industrial Engineer was tasked to analyze whether it is time to replace the old equipment. A new machine costs 10,000 with a useful life of 3 years. The new operational and repair maintenance cost will be 5,000 per year. There is no disposal value of the old machine. The Industrial Engineer needs to analyze the relevant costs of the two machines for the said years. 1. What is the relevant cost of the old machine? a. P 10,000 b. P 30,000 C. P 36,000 d. P 12,000 e. none of the above 2. (Same question and choices as number 29) 3. What is the relevant cost of the new machine? a. P5,000 b. P 10,000 C. P 15,000 d. P 25,000 e. none of the above 4. (Same question and choices as number 31) 5. What is the differential cost of the two machines? a. P5,000 b. P 11,000 C. P 13,000 d. P 15,000 e. none of the above 6. (Same question and choices as number 33) 7. What is the recommendation of the Industrial Engineer? a. keep the old machine b. replace the old machine