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FHI is considering replacing the equipment it currently uses to manufacturing it planes. It could...

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Accounting

FHI is considering replacing the equipment it currently uses to manufacturing it planes. It could purchase replacement requirement for $570,000 that has an expected useful life of four years and a salvage value of $58,000. The new equipment would increase productivity substantially, reducing unit-level labor costs by 20 percent.Assume that FHI would maintain its production and sales at 6,800 planes per year.Prepare a schedule that shows the relevant costs of operating the old equipment versus cost of operating the new equipment. Should FHI replace the equipment?
Relevant Cost Comparison
Old equipment new equipment
Cost of new equipment (correct) Answer is 0 Answer is 512.000
Unit-level labor costs (correct) Answer is 1,904,000 Answer is 1,523,000
Opportunity to lease the old equipment (correct) Cant figure out the answer, need help with the answer, Answer is 0
Total relevant costs Answer is 2,035,200

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