The Clampton Company decides to purchase the equipment, hereafter called Model A. Two years later, even better equipment (called Model B) is available on the market and makes the other equipment completely obsolete, with no resale value. The Model B equipment costs $150,000 delivered and installed, but it is expected to result in annual savings of $40,000 over the cost of operating the Model A equipment. The economic life of Model B is estimated to be five years. It will be depreciated at a straight-line rate of 20 percent. c. what action should the company take? d. The company decides to purchase the Model B equipment, but a mistake has been made somewhere, because good equipment, bought only two years previously, is being scrapped. How did this mistake come about?