Mead Company is considering the replacement of some of its manufacturing equipment. Information regarding the existing equipment and the potential replacement equipment follows:

Existing Equipment				Replacement Equipment
Cost	$	300,000		Cost	$	250,000
Operating expenses*		240,000		Operating expenses*		160,000
Salvage value		40,000		Salvage value		40,000
Market value		120,000		Useful life		8	years
Book value		90,000
Remaining useful life		8	years

*The amounts shown for operating expenses are the cumulative total of all such expected expenses to be incurred over the useful life of the equipment.

Required

Calculate the total relevant cost of existing equipment and the potential replacement equipments. Should the equipment be replaced?

Total cost new?

Total cost old?