Answer:
Yes, the machine should be replaced
Explanation:
The computation is shown below:
Particulars old Machine New machine
Purchase price $300,000
Less:
Salvage value -$80,000
Operating cost $400,000 $144,000
($100,000 × 4 ) ($36,000 × 4)
Total cost $400,000 $364,000
So, the financial advantage is
= $400,000 - $364,000
= $36,000
Since there is a financial advantage of $36,000 so the old machine should be replaced with the new machine