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

Original cost $$10,000$ $$15,000$

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 $ $0$ $ $0$

Annual depreciation $ $2,000$ $ $3,000$