Last year, Novak Condos installed a mechanized elevator for its tenants. The owner of the company, Edward Lewis, recently returned from an industry equipment exhibition where he watched a computerized elevator demonstrated. He was impressed with the elevator's speed, comfortable ride, and cost efficiency. Upon returning from the exhibition, he asked his purchasing agent to collect price and operating cost data on the new elevator. In addition, he asked the company's accountant to provide him with cost data on the company's existing elevator. The information is presented below: Old Elevator New Elevator Purchase price $118,800 $180,700 Estimated salvage value 0 0 Estimated useful life 6 years 5 years Depreciation method Straight-line Straight-line Annual operating expenses other than depreciation: Variable $34,900 $12,200 Fixed 23,100 8,100 Annual revenues are $239,200 and selling and administrative expenses are $29,100, regardless of which elevator is used. If it replaces the old elevator now, at the beginning of 2022, Novak Condos will be able to sell it for $25,200. Determine any gain or loss if the old elevator is replaced. If the old elevator is replaced Novak Condos will incur a select an option of $enter a dollar amount . Question Part Score--/2 Prepare a 5-year summarized income statement for each of the following assumptions: (1) The old elevator is kept. Sales $enter a dollar amount Less costs: Variable operating costs $enter a dollar amount Fixed operating costs enter a dollar amount Selling and administrative enter a dollar amount Depreciation enter a dollar amount enter a subtotal of the four previous amounts Net income $enter a total amount (2) The old elevator is replaced. Sales $enter a dollar amount Less costs: Variable operating costs $enter a dollar amount Fixed operating costs enter a dollar amount Selling and administrative enter a dollar amount Depreciation enter a dollar amount enter a subtotal of the four previous amounts Operating income enter a total amount for the first part Less: Loss on old elevator enter a dollar amount Net income $enter a total amount Question Part Score--/10 Using incremental analysis, determine whether the old elevator should be replaced. (If an amount reduces the net income then enter with a negative sign preceding the number, e.g.-15,000 or parenthesis, e.g. (15,000).) Retain Old Elevator Replace Old Elevator Net Income Increase (Decrease) Variable operating costs $enter a dollar amount $enter a dollar amount $enter a dollar amount Fixed operating costs enter a dollar amount enter a dollar amount enter a dollar amount New elevator cost enter a dollar amount enter a dollar amount enter a dollar amount Salvage on old elevator enter a dollar amount enter a dollar amount enter a dollar amount Totals $enter a total amount $enter a total amount $enter a total amount The old elevator select an option be replaced.\