Rundle Company is considering the replacement of some of its manufacturing equipment. Information regarding the existing equipment and the potential replacement equipment follows.
tableExisting Equipment,Replacement Equipment,Historical cost$Market price,Operating expensesOperating expensesSalvage value,Salvage value,Market value,Useful life, yearsBook value,Remaining useful life, 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?
tableOld,NewTotal costShould the equipment be replaced?,No
