Vernon Company is considering the replacement of some of its manufacturing equipment. Information regarding the existing equipment and the potential replacement equipment follows. Existing Equipment Replacement Equipment Cost $117,000 Cost $116,000 Operating Operating 118,000 99,000 expenses* expenses* Salvage value 29,000 Salvage value 18,000 Market value 41,000 Useful life 8 years Book value 35,000 Remaining useful life 8 years *The amounts shown for operating expenses are the cumulative total of all such expected expenses to be incurred over the useful life of the equipment. Required Calculate the total relevant cost of existing equipment and the potential replacement equipment. Should the equipment be replaced? Old New Total cost Should the equipment be replaced?

pur-new-sol

Related Questions