Old Elevator New Elevator Purchase price Estimated salvage value $120,000 $160,000 0 0 Estimated useful life 5 years 4 years Depreciation method Straight-line Straight-line Annual operating costs other than depreciation: Variable $35,000 $10,000 Fixed 23,000 8,500 0.42 Annual revenues are $240,000, and selling and administrative expenses are $29,000, regardless of which elevator is us elevator is replaced now, at the beginning of 2022, Richter Condos will be able to sell it for $25,000. (a)