Question: Please help! A machine purchased three years ago for $305,000 has a current book value using straight-line depreciation of $183,000; its operating expenses are $31,000
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A machine purchased three years ago for $305,000 has a current book value using straight-line depreciation of $183,000; its operating expenses are $31,000 per year. A replacement machine would cost $233,000, have a useful life of nine years, and would require $13,000 per year in operating expenses. It has an expected salvage value of $67,000 after nine years. The current disposal value of the old machine is $80,000; if it is kept 9 more years, its residual value would be $16,000. Required Calculate the total costs in keeping the old machine and purchase a new machine. Should the old machine be replaced?

Answer is complete but not entirely correct. Keep Old Machine Purchase New Machine 296.000 X Total costs $ 374,000 X $ Should the old machine be replaced? Yes
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