Franklin Freight Company owns a truck that cost $49,000. Currently, the trucks book value is $22,000, and its expected remaining useful life is five years. Franklin has the opportunity to purchase for $26,000 a replacement truck that is extremely fuel efficient. Fuel cost for the old truck is expected to be $5,500 per year more than fuel cost for the new truck. The old truck is paid for but, in spite of being in good condition, can be sold for only $12,000.

Required

Calculate the total relevant costs for keeping old and replace with new. Should Franklin replace the old truck with the new fuel-efficient model, or should it continue to use the old truck until it wears out?