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The Tech Teach Company produces and sells 7,000 modular computer desks per year at a selling price of $750 each. Ils current production equipment, purchased for $1,500,000 and with a 5 year useful life, is only 2 years old. It has a terminal disposal value of $0 and is depreciated on a straight line basis. The equipment has a current disposal price of $500,000. However, the emergence of a new molding technology has led TechTeach to consider either upgrading or replacing the production equipment. The following table presents data for the two alternatives Click to view the data for the two alternatives.) Read the requirements Requirement 1. Should TechTeach upgrade its production line or replace itShow your calculations. Determine the total relevant costs over 3 years. (If an input field is not used in the table, leave the input field empty, do not enter a zero. Use parentheses or a minus sign for numbers to be subtracted.) Over 3 years Replace - X Upgrade Difference Data Table A B Total relevant costs - X Requirements 1 Upgrade Replace 2 One-time equipment costs $ 2,600,000 $ 4.700.000 3 Variable manufacturing cost per desk $ 1745 70 4 Remaining useful life of equipment in years) 3 3 5 Terminal disposal value of equipment $ a $ D All equipment costs will continue to be depreciated on a straight-line basis. For simplicity, ignore income taxes and the time value of money. 1. Should TechTeach upgrade ils production line or replace it? Show your calculations. 2. Now suppose the one-time equipment cost to replace the production equipment is somewhat negotiable. All other data are as given previously. What is the maximum one-lime equipment cost that Tech Teach would be willing to pay to replace rather than upgrade the old equipment? 3. Assume that the capital expenditures to replace and upgrade the production equipment are as given in the original exercise, but that the production and sales quantity is not known. For what production and sales quantity would TechTeach (a) upgrade the equipment or (b) replace the equipment? 4. Assume that all data are as given in the original exercise. Dan Doria is Tech Teach's manager, and his bonus is based on operating income. Because he is likely to relocate after about a year, his current bonus is his primary cancer. Which alternative wouki Daria choose? Explain. Print Done Choose from any list or enter any