Rainger Company is considering replacement of some of its manufacturing equipment. Information regarding the existing equipment and the potential replacement equipment follows.

Required
Based on this information, recommend whether to replace the equipment. Support your recommendation with appropriate computations.

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Existing Equipment Replacement Equipment Cost Operating expenses* Salvage value Market value Book value Remaining useful life *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. Cost $120,000 $105,000 Operating expenses* Salvage value Useful life 30,000 60,000 33,000 8 years 20,000 8 years