Jung Company is considering whether to replace some of its manufacturing equipment. Information pertaining to the existing equipment and the potential replacement equipment follows:

Required
Based on this information, recommend whether to replace the equipment. Support your recommendation with appropriatecomputations.

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Existing Equipment Replacement Equipment Cost Operating expenses Salvage value Market value Book value Remaining useful life $54,000 8,000 16,000 10 years $60,000Cost 48,000 8,000 17,000 21,000 10 years Operating expenses* Salvage value Useful life The amounts shown for operating expenses are the cumulative total of all such expenses expected to be incurred over the useful life of the equipment.