Answer the Following Questions Using the Information Below:
Frederick Company

Multiple Choice

Answer the following questions using the information below:
Frederick Company is considering replacing a machine.The following data are available:
$\begin{array}{lrr}&& \text { Replacement } \\&\text { Old Machine } & \text { Machine }\\\text { Original cost } & \$ 45000 & \$ 35000 \\\text { Useful life in years } & 10 & 5 \\\text { Current age in years } & 5 & 0 \\\text { Book value } & \$ 25000 & - \\\text { Disposal value now } & \$ 6000 & - \\\text { Disposal value in 5 years } & 0 & 0 \\\text { Annual cash operating costs } & \$ 6500 & \$ 4000\end{array}$
-For the decision to keep the old machine,the relevant costs of keeping the old machine total:

A) $72 000
B) $32 500
C) $47 000
D) $60 000