Madison Optometry Is Considering the Purchase of a New Lens

Essay

Madison Optometry is considering the purchase of a new lens grinder to replace a machine that was purchased several years ago.Selected information on the two machines is given below:

$\begin{array}{l}\begin{array}{lll}\\ \\\text {Original cost when new}\\\text {Accumulated depreciation to date}\\\text {Current salvage value}\\\text {Annual operating cost}\\\text {Remaining useful life}\\\end{array}\begin{array}{lll}\text { OId} &\text { New} \\\text { Machine } &\text { Machine } \\ \$ 80,000 & \$ 85,000 \\32,000 & ---\\26,000 &--- \\4,000 & 3,000 \\4 \text { years } & 4 \text { years}\end{array}\end{array}$

Ignore income taxes and the time value of money in this problem.

Required:

Compute the total advantage or disadvantage of using the new machine instead of the old machine over the next four years.