John Aggie Company is considering the replacement of a piece of equipment with a newer model. The following data has been collected:

	old equipment	new equipment
purchase price	$150,000	$150,000
Accumulated depreciation	$100,000	$0
Annual operating costs	$70,000	$45,000

If the old equipment is replaced now it can be sold for $15,000 . and the new equipment useful life is five years. the company uses straight-line depreciation with a zero salvage value for all of its assets. what is the net increase Or decrease in the cost of replacing the old equipment with the new equipment? Show your calculations.

Answer rating: 100% (QA)

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