Required:a) Determine any gain or loss if the old equipment is replaced. b) Using incremental analysis, determine if the old equipment should be replaced.

Part 3 15 MARKS Last m; Intuit installed new factory equipment The company's Senior Production Manager recently returned from an industry equipment exhibition where he watched computerized equipment demonstrated. He was impressed with the equipment's speed and cost efciency. Upon returning from the exhibition. he asked the company's purchasing agent to collect price and operating cost data on the new equipment. In addition. he asked the company's accountant to provide him with cost data on the company's current equipment. This information is presented below: Old Equipment New Equipment Purchase price $252,000 $330,000 Estimated salvage value 0 0 Estimated useful life 6 years 5 years Depreciation method Straight-line Straight-line Annual operating costs other than depreciation: Vblt'.' $ 52.000 5 15,000 Fixed 40..\" 6.0\"] if the old equipment is replaced now, Intuit will be able to sell it for $150,000