Consider the following data concerning the replacement of old equipment by new equipment:

1. Prepare a cost comparison of all relevant items for the next 3 years together. Ignore taxes.

2. Prepare a cost comparison that includes both relevant and irrelevant items. 

3. Prepare a comparative statement of the total charges against revenue for the first year. Would the manager be inclined to buy the new equipment? Explain.

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Old Equipment $30,400 Proposed New Equipment $15,300 Original cost Useful life in years Current age in years Useful life remaining in years Accumulated depreciation Book value Disposal value (in cash) now Annual cash operating costs (mainte $19,000 11,400 3,500 $11,800 6,200 nance, power, repairs, lubricants, etc.)