Nochan relies heavily on a copier machine to process its paperwork. Recently, the copy clerk has not been able to process all the necessary copies within the regular work week. Management is considering updating the copier machine with a faster model.

Current Copier New Model

Original purchase cost $10,000 $20,000

Accumulated depreciation 8,000

Estimated operating costs (annual) 7,000 2,600

Useful life 5 years 5 years

If sold now, the current copier would have a salvage value of $650. If operated for the remainder of its useful life, the current machine would have zero salvage value. The new machine is expected to have zero salvage value after five years.

Required: Relevant cost of buying a new copier