=+8-43 KK Equipment replacement decisions and performance evaluation OBJECTIVES 2, 7, 8 Bob Marsden manages the Victorian plant of George Manufacturing. He has been approached by a representative of Garfield Engineering regarding the possible replacement of a large piece of manufacturing equipment that George uses in its process with a more efficient model. While the representative made some compelling arguments in favour of replacing the 3-year-old equipment, Bob is hesitant. He is hoping to be promoted next year to manager of the larger New South Wales plant, and he knows that the accrual-basis net operating income of the Victorian plant will be evaluated closely as part of the promotion decision. The following information is available concerning the equipment replacement decision: