When conducting an incremental analysis, how do the salvage value and the book value of an existing machine impact the retain-or-replace decision?

Select answer from the options below

Neither the book value nor the salvage value of the machine is relevant to the decision-making process because both of them represent qualitative factors that cannot be gauged in incremental analysis.

Both the salvage value and the book value of the machine are relevant to the decision-making process because both represent quantitative factors that contribute to the income associated with retaining or replacing a machine.

The book value of the machine is relevant to the decision-making process, but the salvage value is not relevant because the book value represents opportunity cost and the salvage value represents quantitative factors.

The salvage value of the machine is relevant to the decision-making process, but the book value is not relevant because the salvage value represents income and the book value represents sunk costs.