Required: GH Company is trying to decide whether to replace a current piece of machinery with a new machine. Using the below data, determine the relevant costs of the old machine and the new machine. Should GH Company purchase the new machine?

Problem 2 Required: GH Company is trying to decide whether to replace a current piece of machinery with a new machine. Using the below data, determine the relevant costs of the old machine and the new machine. Should GH Company purchase the new machine? (30 points) Old Machine New machine Original cost Accumulated depreciation Book value 100,000 50,000 50,000 Market value (novw Salvage value (in 5 years) Annual depreciation expense Operating expenses 25,000 5,000 11,000 30,000 8,000 Per year Times number of years 9,000 4 36,000 4,500 4 18,000 Total operating expenses