Question 4 For Your Eyes Only Optometry is considering the purchase of a new lens grinder to replace a machine that was purchased several years ago. Selected information on the two machines is given below: Old New Machine Machine Original Cost when new $80,000 $85,000 Accumulated Depreciation to Date $32,000 Current Salvage Value $26,000 Annual operating Cost $4,000 $3,000 Remaining Useful Life 4 Years 4 Years Required: a) Compute the total advantage or disadvantage of using the new machine instead of the old machine over the next four years using the NPV method and assuming a discounted rate of 10%. Assume that neither machine will have any salvage value at the end of four years. b) Should we buy the New Machine or keep the old Machine. Hint: The Present Value Factor of $1 for year 4 is 0.683 using a discount factor of 10% and the Present Value of an Annuity of $1 is 3.170 for years 1 to 4 using a discount rate of 10% You may use either the Total Cost or Incremental Cost Method for your calculation