formation applies to the questions displayed below.] VacuTech manufactures sophisticated instruments for testing microcircuits. Each instrument sells for $3,500, variable manufacturing cost per unit (all cash) equals $2,450. An essential component of the company's manufacturing process is a sealed vacuum chamber where the interior approaches a pure vacuum. The technology of the vacuum pumps that the firm uses to prepare its chamber for sealing has been changing rapidly. On June 1, 2018, VacuTech bought the latest in electronic high-speed vacuum pumps that can evacuate a chamber for sealing in only 6 hours. The company paid $400,000 for the pump. Recently, the pump's manufacturer approached VacuTech with a new pump that would reduce the evacuation time to 2 hours. VacuTech's management is considering the purchase of this new pump and has asked Doreen Harris, the company controller, to evaluate the financial impact of replacing the existing pump with the new model. Doreen has gathered the following information prior to preparing her analysis: The new pump could be installed and placed in service on January 1, 2022. The pump's cost is $608,000; Installing, testing, and debugging the machine will cost $12,000 (which should be capitalized). The pump would be assigned to the 3-year class for depreciation under the Modified Accelerated Cost Recovery System (MACRS) and is expected to have an $80,000 salvage value when it is sold at the end of 4 years. Depreciation on the equipment would be recognized starting in 2022, and MACRS rates (rounded) would be as follows: