Chung Inc. is considering the replacement of a piece of equipment with a newer model. Both the old equipment's remaining useful life and the new equipment's useful life is 5 years. The following data has been collected

Retain Equipment Replace Equipment Annual operating costs $300,000 $240,000 New Machine cost 0 375,000 Sale of old machine o ($60,000) 1. What is the net cost of the new equipment? a. $375,000 b. $315,000 c. $150,000 d. $75,000 2. What is the impact on net income of replacing the old equipment? a. Increase of $60,000 b. Decrease of $15,000 c. Decrease of $75,000 D. Increase of $90,000 3. What should be done? a. Retain. b. Replace