Show solution step by step

THE FOLLOWING INFORMATION APPLES TO QUESTIONS 2 THROUGH 4. Frederick, Inc. is considering replacing a machine. The following data are available: Old Machine New Machine Original Costs $45,000 35.000 Useful Life in Years Current Age in Years Net Book Value 25,000 Disposal Value Now $8,000 Disposal Value in 5 Years Annual Cash Operating Cost $7,000 x $4,000 2. Sunk costs include The annual cash operating cost of the old machine b. The annual cash operating cost of the new machine. c. The disposal value of the old machine The original cost of the old machine. 3. For the decision to keep the old machine, the total of the relevant costs is: a.) $60,000 $35,000 c. $47,000 d. $72,000 4. difference in relevant costs between keeping the old machine and replacing the old machine is $37,000 in favor of keeping the old machine. b. $12,000 in favor of keeping the old machine c. $37,000 in favor of replacing the old machine. d. $12,000 in favor of replacing the old machine