Problem: Module 6 Textbook Problem 10 Learning Objective: 6-5 Make appropriate asset replacement decisions Campbell Company is considering the replacement of some of its manufacturing equipment. Information regarding the existing equipment and the potential replacement equipment follows. Existing Equipment Replacement Equipment Cost $119,000 Cost Operating expenses* 110,000 Operating expenses* Salvage value 23,000 Salvage value Market value 45,000 Useful life Book value 32,000 Remaining useful life 6 years $125,000 104,000 10,000 6 years *The amounts shown for operating expenses are the cumulative total of all such expected expenses to be incurred over the useful life of the equipment. Required Calculate the total relevant cost of existing equipment and the potential replacement equipment. Should the equipment be replaced? Total cost Old New Should the equipment be replaced?