Perez Company is considering the replacement of some of its manufacturing equipment. Information regarding the existing equipment and the potential replacement equipment follows. Existing Equipment Historical cost Operating expenses* Salvage value Market value Book value Remaining useful life $ 115,000 117,000 25,000 51,000 35,000 Old 9 years Total cost Should the equipment be replaced? Replacement Market price Operating expenses* Salvage value Useful life Equipment *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. New $ 117,000 97,000 Required Calculate the total relevant cost of existing equipment and the potential replacement equipment. Should the equipment be replaced? 12,000 9 years C

Perez Company is considering the replacement of some of its manufacturing equipment. Information regarding the existing equipment and the potential replacement equipment follows. "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 equipment. Should the equipment be replaced