Do It! Review 7-5 Your answer is partially correct. Try again. Darcy Roofing faced with a decision. The company relies very heavily on the use of its 60-foot extension lift for work on large homes and commercial properties. Last year, Darcy Roofing spent $67,200 refurbishing the lift. It has just determined that another $31,000 of repair work is required. Alternatively, it has found a newer used lift that is for sale for $132,500. The company estimates that both lifts would have useful lives of 6 years. The new lift is more efficient and thus would reduce operating expenses by about $22,400 per year. Darcy Roofing could also rent out the new lift for about $8,000 per year. The old lift is not suitable for rental. The old lift could currently be sold for $19,500 if the new lift is purchased. Prepare an incremental analysis showing whether the company should repair or replace the equipment. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Retain Equipment Replace Equipment Net Income Increase (Decrease) Operating expenses 134400 0 134400 Repair costs 31000 0 31000 E Rental revenue 0 48000 48000 New machine cost 0 132500 132500 Sale of old machine 0 19500 19500 Total cost 165400 65000 100400 Should company repair or replace the equipment? should not The equipment be replaced. Click if you would like to Show Work for this question: Open Show Work