Bridgeport Inc. is considering modernizing its production facility by investing in new equipment and selling the old equipment. The following information has been collected on this investment:

Old Equipment				New Equipment
Cost		$81,040		Cost		$38,000
Accumulated depreciation		$40,800		Estimated useful life		8 years
Remaining life		8 years		Salvage value in 8 years		$4,800
Current salvage value		$9,860		Annual cash operating costs		$30,700
Salvage value in 8 years		$0
Annual cash operating costs		$35,900

Depreciation is $10,130 per year for the old equipment. The straight-line depreciation method would be used for the new equipment over an eight-year period with salvage value of $4,800.