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