Question: Planet Design Services, Inc., is considering replacing a machine. The following data are available: Old Machine Replacement Machine Original cost $670,000 $490,000 Useful life in

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

Old Machine

Replacement Machine

Original cost

$670,000

$490,000

Useful life in years

8

4

Current age in years

4

0

Book value

$350,000

-

Disposal value now

$ 162 comma 000$162,000

-

Disposal value in

44

years

$0

$0

Annual cash operating costs

$108,000

$57,000

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

A.$840,000 in favor of replacing the old machine

B. $124,000 in favor of keeping the old machine

C. $840,000 in favor of keeping the old machine

D. $124,000 in favor of replacing the old machine

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