Problem: Module 6 Textbook Problem 10 Learning Objective: 6-5 Make appropriate asset replacement decisions Vernon 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 $101,000 Cost $108,000 Operating expenses* 113,000 Operating expenses* 100,000 Salvage value 29,000 Salvage value Market value. 57,000 Useful life 11,000 6 years Book value 36,000 Remaining useful life 6 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 equipment. Should the equipment be replaced? Total cost Old New Should the equipment be replaced?