Tesla management are trying to decide whether to keep an older piece of machinery or buy a replacement. Management was presented with the following information to assist in their decision:

A machine purchased three years ago for $$308,000$ has a current book value using straight$-$line depreciation of $$191,000$; its operating expenses are $$37,000$ per year. A replacement machine would cost $$222,000,$ have a useful life of nine years, and would require $$9,000$ per year in operating expenses. It has an expected salvage value of $$63,000$ after nine years. The current disposal value of the old machine is $$72,000$; if it is kept nine more years, its residual value would be $$20,000.$

Required

Calculate the total costs in keeping the old machine and purchase a new machine. Should the old machine be replaced?

Required

Calculate the total relevant costs. Should Adams replace the old truck with the new fuel$-$efficient model, or should it continue to use the old truck until it wears out?