Planet Design Services, Inc., is considering replacing a machine. The following data are available:

Replacement

Old Machine Machine

Original cost $650,000 $510,000

Useful life in years 10 5

Current age in years 5 0

Book value $400,000

Disposal value now $142,000

Disposal value in 5 years 0 0

Annual cash operating costs $100,000 $66,000

The difference between keeping the old machine and replacing the old machine is ________.

	1.	$910,000 in favor of keeping the old machine
	2.	$198,000 in favor of keeping the old machine
	3.	$910,000 in favor of replacing the old machine
	4.	$198,000 in favor of replacing the old machine