Hope Company is considering replacing its existing wrapping system with new equipment. The existing system has a book value of $125,000 and a remaining useful life of two years. The new wrapping system would cost $300,000 and have a useful life of five years with an estimated salvage value of $50,000. The annual production of 10,000 units would not change. It would, however, reduce direct labor costs by $6 per unit. Other fixed costs would increase by $50,000 per year.
Of the information just given, which items are relevant to the decision to replace the equipment?