Ivanhoe Roofing is faced with a decision. The company relies very heavily on the use of its 60-foot extension lift for work on large homes and commercial properties. Last year, Ivanhoe Roofing spent $74,400 refurbishing the lift. It has just determined that another $41,500 of repair work is required. Alternatively, it has found a newer used lift that is for sale for $177,000. The company estimates that both lifts would have useful lives of 5 years. The new lift is more efficient and thus would reduce operating expenses from $105,000 to $80,200 each year. Ivanhoe Roofing could also rent out the new lift for about $10,500 per year. The old lift is not suitable for rental. The old lift could currently be sold for $26,000 if the new lift is purchased. The new lift and old lift are estimated to have salvage values of zero if used for another 5 years. Prepare an incremental analysis showing whether the company should repair or replace the equipment. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Retain Replace Net Income Equipment Equipment Increase (Decrease) Operating expenses to 124000 $ $ 124000 Repair costs 41500 H. 0 41500 Rental revenue 0 -52500 i 52500 New machine cost 0 177000 i -177000Sale of old machine Should company repair or replace the equipment? The equipment be replaced. -26000 i $ 67000 $ 26000 31500