Sala Co Is Contemplating the Replacement of an Old Machine with with a New

Sala Co. is contemplating the replacement of an old machine with a new one. The following information has been gathered: $\begin{array}{llll}&\text { Old Equipment }&\text { New Equipment }\\\text { Price } & \$ 300,000 & & \$ 600,000 \\\text { Accumulated Depreciation } & 90,000 & & -0- \\\text { Remaining useful life } & 10 \text { years } & & -0 \text { - } \\\text { Useful life } & -0 \text { - } & & 10 \text { years } \\\text { Annual operating costs } & \$ 240,000 & & \$ 180,600\end{array}$
$\text { If the old machine is replaced it can be sold for } \$ 24,000 \text {. }$ The net advantage (disadvantage) of replacing the old machine is

A) $18,000
B) $24,000
C) $(6,000)
D) $(60,000)

Correct Answer:

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