CALCULATOR PRINTER VERSION BACX NEXT Problem 20-4A (Part Level Submission) Last year (2016), Richter Condos installed a mechanized elevator for its tenants. The owner of the company, Ron exhibition where he watched a computerized elevator demonstrated. He was impressed with the elevator's the exhibition, he asked his purchasing agent to collect price and operating cost data on the new equipment speed, comfort of ride, and cost efficiency. Upon returning from elevator. In addition, he asked the company's accountant to provide him with cost data on the company's elevator. This information is presented below. Old Elevator New Elevator Purchase price Estimated salvage value Estimated useful life Depreciation method Annual operating costs $104,500 161,000 5 years 4 years Straight-line Straight-line other than depreciation: Variable $35,600 23,200 $11,000 9,000 Fixed Annual revenues are $239,000, and selling and administrative expenses are $29,000, regardless of which elevator is used. If the old elevator is replaced now, at the beginning of 2017, Richter Condos will be able to sell it for $24,700. (a) Your answer is correct. Determine any gain or loss if the old elevator is replaced. Loss on sale t 58900 (b) ]Your answer is correct. Prepare a 4-year summarized income statement for each of the following assumptions: (1) The old elevator is retained. Retain Old Elevator Revenues 956000 Less costs: Variable costs 142400 Fixed costs 92800 Selling & administrative 116000 Depreciation 83600 434800 521200 Net income (2) The old elevator is replaced (2) The old elevator is replaced. Replace Old Elevator Revenues 956000 Less costs Variable costs 44000 Fixed costs 36000 Selling & administrative 116000 Depreciation 161000 357000 Operating income 599000 Less: Loss on old elevator 58900 540100 Net income Open Show Work Click if you would like to Show Work for this question: (c) Using incremental analysis, determine if the old elevator should be replaced. (Enter negative amounts using eit or parentheses e.g. (45).) Net Income Increase Retain Old Elevator Replace Old Elevator(Decrease) Variable operating costs Fixed operating costs New elevator cost Salvage on old elevator Totals Click if you would like to Show Work for this question: Open Show Work LINK TO TEXT