Answer:
The company should replace the equipment.
Explanation:
The cost analysis is calculated as follows;
                          Retain                Replace                 Net Income
                                      Equipment        Equipment         Increase (Decrease)
Operating expenses     $146,400                0                      $146,400
($24,400*6)  
Repair costs            $39,000                 0                    $39,000
Rental revenue                      0                 -$60000              $60,000
($10,000*6)  
New machine cost              0                $166,500            -$166,500
Sale of old machine  
0               -$24,500              $24,500
Total cost                  $185,400   $82,000               $103,400
From the calculation above, the equipment should be replaced as it incur a lesser cost compare to when it is retained.