The law firm of Sandhill and Sweet Acacia relies heavily on a colour laser printer to process its paperwork. Recently the printer has not functioned well and print jobs were not being processed. A major overhaul costing $10,000 would make the current printer work properly for the balance of its useful life. Management is considering updating the printer with a faster model.

		Current Printer			New Model
Original purchase cost		$31,500			$25,700
Accumulated depreciation		18,100
Estimated operating costs (annual)		3,100			2,100
Useful life		5 years			5 years

Keep Printer Replace Printer Net Income Increase (Decrease) Period of 5 years Variable costs Major overhaul Salvage value New machine cost The company should the printer