Amanda Company Is Considering the Replacement of a Machine That

Amanda Company is considering the replacement of a machine that is presently used in production.The following data are available:
$\begin{array}{lll}&\text { Old Machine }&\text { NEW Machine }\\\text { Original cost } & \$ 200,000 & \$ 160,000 \\\text { Useful life in years } & 10 & 5 \\\text { Current age in years } & 5 & 0 \\\text { Book value } & \$ 100,000 & -\\\text { Disposal value now } & \$ 32,000 & - \\\text { Disposal value in } 5 \text { years } & 0 & 0 \\\text { Annual cash operating costs } & \$ 20,000 & \$ 14,000\end{array}$
Adding all five years together,the total relevant costs to consider if the new machine is purchased is ________.

A) $70,000
B) $100,000
C) $198,000
D) $230,000

Correct Answer:

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