Last year, Pharoah Condos installed a mechanized elevator for its tenants. The owner of the company, Brian Lee, recently returned from an industry equipment exhibition where he watched a computerized elevator demonstrated. He was impressed with the elevator's speed, comfortable ride, and cost efficiency. Upon returning from the exhibition, he asked his purchasing agent to collect price and operating cost data on the new elevator. In addition, he asked the company's accountant to provide him with cost data on the company's existing elevator. The information is presented below: Old Elevator New Elevator Purchase price Estimated salvage value Estimated useful life Depreciation method Annual operating expenses other than depreciation: Variable Fixed $123,600 $180,300 0 0 6 years 5 years Straight-line Straight-line $35.100 $12,800 22.300 8.200