Sleek Looks has been using the same machines to make its name brand clothing for the last five

years. A cost efficiency consultant has suggested that production costs may be reduced by

purchasing more technologically advanced machinery. The old machines cost the company

$$100,000.$ The old machines presently have a book value of $$60,000$ and a market value of $$6,000.$

They are expected to have a five$-$year remaining life and zero salvage value. The new machines

would cost the company $$50,000$ and have operating expenses of $$9,000$ a year. The new

machines are expected to have a five$-$year useful life and no salvage value. The operating expenses

associated with the old machines are $$15,000$ a year. The new machines are expected to increase

quality, justifying a price increase, and thereby increasing sales revenue by $$5,000$ a year. Which

of the following statements is true?

The company will be $$6,000$ better off over the $5-$year period if it replaces the old

equipment.

The company will be $$11,000$ better off over the $5-$year period if it replaces the old

equipment.

The company will be $$12,000$ better off over the $5-$year period if it replaces the old

equipment.

The company will be $$20,000$ better off over the $5-$year period if it keeps the old

equipment.