Skeller is using an old machine in it's printing operations. The machine cost 400000 many years ago. Accumulated depreciation on the machine is 180000. Skeller is currently recording 22000 of depreciation each year on the machine. The machine will likely last 10 more years but only if Skeller spends 30000 per year on maintenance. In 10 years Skeller can likely sell the machine for 3000. Today, the machine is worth 52000. Skeller is considering buying a new machine to replace the old one. The new machine will cost 720000. Skeller plans to keep the machine 10 years. It can sell the new machine for 95000 at that point. Skeller will depreciate the new machine using straight-line depreciation at the rate of 62500 per year. ([720000-95000]/10 = 62500) The new machine would allow Skeller to expand services. Skeller estimated they would increase their contribution margin by 22000 per year. Ignoring taxes and time value of money- and based only on the estimates above, compute the difference in costs over the next 10 years given the two alternatives.

Which alternative is preferable (has the lower total cost). Type Keep or Replace

How much is the cost of the preferable alternative lower than the other alternative? Enter as a positive number.