Down East Chemicals is considering replacing its existing computer system with a new computer system. The new system can offer considerable savings in computer processing and inventory management costs. Information about the existing system and the new system follow: Existing Computer New Computer $10,000 $15,000 Original cost Annual operating cost $ 3,500 $ 2,000 Accumulated depreciation $ 6,000 Current salvage value of the existing system $ 4,000 Remaining life in 5 years 5 years Salvage value in 5 years Annual depreciation $ 2.000 $ 3.000 Should Down East Chemicals replace the existing computer system with the new system? What are the cash flow savings or additional cost over the 5 years? Ignore income taxes. No, do not replace; additional costs of $5,000. No, do not replace: additional costs of $3,500. Yes, replace: net savings of $5,000. Yes, replace; net savings of $15.000