Morris Timber Corporation uses a machine that removes the bark from cut timber. The machine is unreliable and results in a significant amount of downtime and excessive labor costs. The management is considering replacing the machine with a more efficient one which will minimize downtime and excessive labor costs. Data are presented below for the two machines:Old Machine New MachineOriginal purchase cost $340,000 $370,000Accumulated depreciation 230,000 —Estimated life 5 years 5 yearsIt is estimated that the new machine will produce annual cost savings of $85,000. The old machine can be sold to a scrap dealer for $8,000. Both machines will have a salvage value of zero if operated for the remainder of their useful lives. InstructionsDetermine whether the company should purchase the new machine.